PRIVATE BUSINESS

Bournemouth Borough Council Bill [ Lords]  (By Order)
	 — 
	Manchester City Council Bill [ Lords]  (By Order)

Orders for Second Reading read.
	 To be read a Second time on Tuesday 22 January.

Oral Answers to Questions

COMMUNITIES AND LOCAL GOVERNMENT

The Secretary of State was asked—

Violent Extremism

David Davies: What recent assessment she has made of the effectiveness of the preventing violent extremism programme; and if she will make a statement.

Hazel Blears: Over the past nine months, through the pathfinder fund, we have supported more than 200 projects in 70 local authorities. During the course of this year we will carry out a formal evaluation of these projects, but so far it is already clear that more women and young people are involved in helping to build stronger and more resilient communities.

David Davies: The Home Office has estimated that thousands of British Muslims in this country support both the means and the ends of various Islamic terror groups. Can the Minister give a solemn assurance to this House that not one single penny of the money that she has allocated under this scheme has gone to any individual or organisation with any links whatsoever to Islamic terrorism?

Hazel Blears: Let me first make it absolutely clear that the vast, overwhelming majority of Muslims in this country abhor violence, abhor terrorism and do not support the tiny minority of people involved in violent extremism. The work that my Department is funding, and will be funding in a substantially greater way over the next three years, is directed at building the resilience and strength of local communities to resist that extremism. We will monitor very carefully indeed the groups to which this money is allocated, and I will certainly ensure that we fund groups who absolutely stand up and condemn terrorism and want to participate in tackling it.

James McGovern: When I go to the mosques in my constituency, the red carpet is rolled out, so to speak, and I am sure that the same applies to many other hon. Members. What happens there is that I meet imams and elders of the Muslim community, and perhaps that means that we are not engaging enough with younger members of the Muslim community. Does the Minister agree that it is vital that we open a dialogue with young men and young women from the Muslim community in order to ensure the success of the Government's programme?

Hazel Blears: Yes, I entirely agree with my hon. Friend. I am very grateful to hon. Members in all parts of the House who take this responsibility seriously in their constituencies and are involved in that dialogue. Part of the work of the Mosques and Imams National Advisory Board, which is the national organisation from the community itself that is looking at governance in mosques, concerns how we get more young people and women involved in the mosques; that will take us a considerable way forward.

Paul Rowen: May I associate myself with the Secretary of State's remarks? I entirely agree that that is what is happening in Rochdale. Does she agree that a key priority needs to be ensuring that we have more imams who are trained and brought up in Rochdale— [ Interruption ] I mean brought up in Britain; in Rochdale would be even better—and what steps is she taking to assist in that development?

Hazel Blears: I am grateful for the hon. Gentleman's kind offer, but I know that there are some extremely good imams in Rochdale. Irfan Chisti works very closely with our Department and makes a great contribution. I agree that we need to have more imams who are trained in this country and who have not only English language skills but community leadership skills. That is why we are funding a programme for imams. In Dudley in the west midlands, 23 imams are currently involved in a leadership development programme that will help them to really engage with Islam in the modern context of living in the 21st century in Britain.

Paul Goodman: The preventing violent extremism programme is clearly important, and I have seen some of the good work myself, including the work in Dudley to which the Secretary of State referred. However, she really must clear up the point that was raised by my hon. Friend the Member for Monmouth (David T.C. Davies). In November, the Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), wrote to me about the programme, saying:
	"The details we hold"—
	that is, the Department—
	"are...no longer a completely accurate reflection of all the work taking place at a local level."
	If the Department does not have fully accurate details, how can it be sure that none of the money—not a penny, as my hon. Friend said—is falling into the hands of separatists and extremists?

Hazel Blears: It is important that we monitor very carefully the way in which these funds are being used. At the same time, however, it is essential that local authorities see this as part of their core business and integrate it into their mainstream activities, because local authorities, whether they are in Luton, Leeds or Birmingham, know the situation on the ground and what can work. As the hon. Gentleman knows from our correspondence, we are currently considering all 200 projects. I am ensuring that information about all those projects and the work that is going on will be placed in the Library next week. Monitoring is absolutely essential. We must also allow local authorities to do the things that work in their local neighbourhoods.

London Development Agency/Mayor of London

John Randall: If she will initiate a review of the governance of the London Development Agency and the arrangements for scrutiny of the activities of the Mayor of London's advisers.

John Healey: The Government have no plans to review the governance of the London Development Agency or the legal basis for the scrutiny of the Mayor's political advisers.

John Randall: I am rather surprised by that answer. Will the Minister confirm that there is a code of conduct for the Mayor, assembly members and assembly staff, but no code at all for the Mayor's political advisers? In light of the controversy over the role of Lee Jasper, who pressurised the LDA into giving grants to his pet organisations, will the Minister think about looking again at the legislation relating to this matter?

John Healey: I am surprised at the hon. Gentleman's surprise. The Greater London authority and the LDA are subject to the same local government finance and audit framework, with the Audit Commission and the district auditor having external inspection and audit powers. He knows that the district auditor has been sent the LDA and GLA internal reviews and will be reviewing whether any further action is necessary.
	The Mayor's advisers report directly to the Mayor. The assembly can hold the Mayor to account for their actions, and it is also able to require their presence at meetings. Indeed, it has done so a number of times in public since 2000.

Kate Hoey: The Minister will know that I asked for the police to be brought in to investigate a number of projects in my area, and he will obviously not want to comment on those, but does he accept that there is growing concern about the cosiness of the relationship between the LDA, the GLA, the Mayor and the Mayor's office? That could have led to the sort of problems, to put it mildly, that we have seen—the huge abuse of how money is spent. If it is found that there is a serious link between how the LDA has worked and the money that has been misspent, does he agree that the whole way in which the LDA operates will have to be looked at? We may have to go back to renewing legislation and changing the law.

John Healey: My hon. Friend is right that it would not be right for me to comment on specific allegations, but I do not accept her description of what has gone on. As I have said, the district auditor will be reviewing whether any further action is required as a result of receiving the two internal reviews from the GLA and the LDA.

Boris Johnson: May I draw the Minister's attention to a letter from MPs of all three parties, calling for an urgent investigation by the local district auditor? In their words:
	"The LDA can no longer be a credible investigator of these allegations."
	Will he confirm that he will take absolutely no further steps to protect the taxpayer in London and the United Kingdom from the wastefulness and cronyism that characterise the expenditure of the LDA?

John Healey: The hon. Gentleman does not need to tell me because I read the  Evening Standard last Friday, as he did. I also read the press release that he put out on that day. It is interesting that he was not on his feet talking about the LDA back in the summer when it delivered the land required for the Olympic park on time—the most complex and largest compulsory purchase order project for the past 20 years. That may have something to do with the elections in May. The fact is that the Mayor we have has been an outstanding leader for London. He has led part of the success of London in recent years, and only today London has won a prestigious international award for the congestion charge—something which the hon. Gentleman opposes.

Bob Neill: I hope that the Minister will take time to read the LDA's report, because the truth is that his washing of his hands is wholly unsatisfactory. Even that report, despite its clear inadequacies, acknowledges the need to review the role of mayoral advisers, based on the limited evidence that resulted in half the instances it investigated being referred to the police. The LDA was criticised in November over some 61 wholly separate grants. It was found that it had not demonstrated that it would get what it expected in return for the funding given, that it had not adequately monitored outcomes, and that it was unable to explain the criteria on which it had based some of its decisions. Government action is needed because the LDA is a serial offender in such matters; it has more form than the Kray brothers.

John Healey: If the hon. Gentleman says that the scrutiny and holding to account of the LDA have been insufficient, he therefore also says that the operation and conduct of the Greater London assembly has fallen far short of what is required. He remains, of course, a member of that assembly.

Housing (Stoke-on-Trent)

Joan Walley: What recent assessment she has made of the demand for council housing in Stoke-on-Trent.

Iain Wright: The Department does not make assessments of the demand for council housing. However, we encourage local authorities to assess the housing needs of their area as part of their strategic housing role. Stoke-on-Trent city council is working on such an assessment with neighbouring authorities in the west midlands region's north housing market area. I understand that it will be published in the spring.

Joan Walley: I thank my hon. Friend for that reply. However, in Stoke-on-Trent, the numbers on the council housing waiting list have increased from 2,000 in 2003 to 8,000 today. I welcome the Government's investment in affordable housing, shared ownership and social housing, but will my hon. Friend reconsider what he can do to help local authorities build new council houses, including through access to the social housing grant?

Iain Wright: I agree that local authorities have a vital role to play in delivering more social housing. On my hon. Friend's point about social housing grant, she may be interested to hear that we have changed the process for awarding the grant to make it easier for high-performing councils, through local authority companies or special venture vehicles, to qualify and compete for it. We are also examining the potential to increase the number of new council houses by allowing councils to operate outside the housing revenue account subsidy system. I hope that she will be encouraged by that answer.

Housing Revenue Account Subsidies

Tom Brake: Whether she plans to change the system of negative housing revenue account subsidies; and if she will make a statement.

Yvette Cooper: There is redistribution within the housing revenue account and I believe that that is right. However, reforms are needed to the housing revenue account and we are already piloting some major changes, which will be supported by the Housing and Regeneration Bill, but we are also conducting a wider, long-term review of the housing revenue account.

Tom Brake: I thank the Minister for her reply. She may know that I had a meeting with the Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), during which I highlighted the impact of the housing revenue account on Sutton's tenants. Thirty-seven per cent. of the rental income there is a negative subsidy. I asked the Under-Secretary a question, which I should now like to repeat to the Minister. Is she willing to freeze those subsidies at the 2007-08 level until her review of HRA is complete so that Sutton's tenants do not pay a heavy price?

Yvette Cooper: As the hon. Gentleman knows, there is a long tradition of acknowledging that some areas have been better funded in the past than others. Some areas have had their council housing funded through different mechanisms, which has put them at an advantage or a disadvantage, and there is different need in different areas. I believe that it is right that there should be some redistribution in the system.
	I do not like the housing revenue account. There is a series of problems with it in enabling councils to manage their assets properly for the long term. However, it is a complex framework and, to reform it, one has to ensure that one is not disadvantaging unfairly other areas and other councils. We have set out the determination for 2008-09, which councils should have received. We will work fast on the housing revenue account review to inform next year's determination.

Clive Betts: I greatly welcome my right hon. Friend's comments and the review to which she has committed the Department. The housing revenue account is not merely a problem for authorities in negative subsidy. The housing revenue account system is a problem in that an authority can get penalised for building new homes and, if tenants want to opt for improvements, they cannot pay extra rent to cover the cost. There is a fundamental dislocation between the service provided and the rents that are charged. For all those reasons, I am sure that my right hon. Friend agrees that a fundamental change in the system would benefit landlords and tenants.

Yvette Cooper: My hon. Friend is right. Part of the problem with the housing revenue account is that one has to wrap one's head in a wet towel every time one tries to work out the details. Such a complex system is not in the interests of people who run housing revenue accounts throughout the country. A system that better rewarded long-term planning and long-term decision making by local councils would be preferable. The pilots that we have established are already trying to find one way in which to approach reform, but the review will be wider and examine a range of options.

Local Government Funding

Simon Hughes: What representations she has received on the statistics used for the calculation of grants to local authorities.

Hazel Blears: We have received more than 300 representations on the provisional local government settlement. As we expected, many of those asked us to check the data used or made other statistical points.

Simon Hughes: The Secretary of State will know that colleagues from Southwark on a cross-party basis had a constructive meeting with the Minister for Local Government last week. One of the matters raised in that discussion, but of concern widely, was out-of-date population figures on the basis of which local government settlements are given. I know the difficulties, but would the Secretary of State be willing to give an undertaking that, if not now—that is, before the final vote is taken, before the settlement comes into force in April—then later this year, when the up-to-date figures are available, there will be a chance to review the settlement on the basis of accurate population information? We cannot give out grant on the basis of figures that are fundamentally out of date.

Hazel Blears: I appreciate the way in which the hon. Gentleman has put his case, and I know that he had a productive meeting. He will know that, in addition to the distribution on the basis of population statistics, we have another mechanism that seeks to protect councils, which is the floor damping mechanism. Southwark will benefit from that over the next three years to the tune of just over £63 million.
	Local government itself wanted a three-year settlement, for the stability, certainty and predictability of its expenditure. The figures that we have used are therefore the best and latest available, and are consistent across local government. It would be wrong to disturb the stability and certainty of the three-year settlement. I therefore cannot give the hon. Gentleman the reassurance that he is looking for—that is, that we will reopen the settlement—because that would inevitably have a huge impact on the stability and certainty that local government has welcomed.

Anne Snelgrove: Swindon borough council was disappointed with the award that it received for its growth point grant. Will my right hon. Friend or one of her colleagues meet me to discuss the council's disappointment and what else it can do? The council did not initially consult Swindon's MPs, but has done so since, which has been very valuable.

Hazel Blears: Clearly my hon. Friend is, in her usual way, a champion and advocate for her constituents. She will be pleased to know that there are further moneys to be allocated. I should be delighted to ensure that my hon. Friend the Minister for Local Government meets her to discuss the position in Swindon, and no doubt she will use her usual articulacy to make the case.

Peter Tapsell: Will the right hon. Lady please take action to increase the weighting of the sparsity factor in the calculation of Government grants to rural areas such as Lincolnshire, where, in a very large county, the police grant is the second smallest in the whole of England, and as a result many of my constituents continually complain of under-policing?

Hazel Blears: Sparsity is one of a number of factors, and is important in reflecting the particular pressures in rural areas. Sparsity is taken into account when we draw up the formula, which is subject to consultation and is regularly reviewed and examined. Clearly it is important that the formula should take into account a wide range of needs and differences, and the truth is that different communities have different needs. That is why my Department is absolutely committed to devolution to local authorities, so that they can tailor their services to meet the kind of pressures that the hon. Gentleman has outlined.

Fiona Mactaggart: I am grateful for the patience that my right hon. Friend and my hon. Friend the Minister for Local Government have shown in listening to representations on behalf of Slough, whose population has grown massively, but which is not having that change reflected, because of failures in the way that Office for National Statistics figures are calculated. Although I recognise the demands of a three-year settlement, is there any prospect at all of some resources being directed to those places that have coped with sudden, urgent growth and which are very diverse, such as Slough? Extra resources, when our—

Mr. Speaker: Order. The Secretary of State will be able to answer.

Hazel Blears: Like my hon. Friend the Member for South Swindon (Anne Snelgrove), my hon. Friend is a real champion. I can tell her two things. First, I have agreed to meet the leader of her local authority to look specifically at those pressures. Secondly, and more generally, hon. Members will know that there is £50 million of extra provision for looking at community cohesion. I anticipate that some of those areas will use some of those funds to look at the pressures and impacts of the rapidly changing communities that can now be found throughout Britain.

Nicholas Winterton: Is the Secretary of State not aware that there is not only growing concern but growing evidence that Labour-controlled authorities get much more generous grants than those authorities controlled by either the Conservatives or the Liberal Democrats? Is it not about time that the formula for the granting of resources to local government became not only genuinely fairer but a lot more transparent?

Hazel Blears: What is true is that, under Labour Governments, all local authorities get better settlements than they did under Tory Governments. In fact, by the time we get to the end of this spending period—

Mr. Speaker: Order. I must put it on the record that an hon. Member has left the Chamber after asking a question before we have moved on to the next question. That is a practice that I will not tolerate, and I suggest that the Whip have a word with the hon. Lady concerned.

Hazel Blears: Thank you, Mr. Speaker.
	I was about to remind the hon. Member for Macclesfield (Sir Nicholas Winterton) that it is Labour Governments who are the most generous to local authorities of whatever political persuasion. Under this Government, we will have had a 45 per cent. real-terms increase in local government spending by the end of this spending review period. None of us will forget that, in the last four years of the last Conservative Government, there was a 7 per cent. real-terms cut in spending for local government.

Mr. Speaker: Order. The hon. Lady has returned, and I am pleased about that, but she should not leave the Chamber until the question on which she has asked a supplementary has finished.

John Bercow: Aylesbury vale is a designated growth area earmarked for substantial additional housing over the next two decades, and I had a very reasonable and constructive exchange on that subject with the Under-Secretary of State for Communities and Local Government, the hon. Member for Hartlepool (Mr. Wright), on 4 December. Will the right hon. Lady tell the House what discussions she has had with her right hon. Friends the Secretary of State for Health and the Secretary of State for Children, Schools and Families to ensure that additional resources are made available on time—that is, concurrently with the housing development—so that health provision and educational facilities are of the standard that my constituents are entitled to expect?

Hazel Blears: The hon. Gentleman raises an important point about ensuring that the new housing developments are part of thriving, vibrant communities that have schools and health facilities that make them the kind of places in which people want to live. There is a great deal of cross-government working going on as a result of the Green Paper to ensure that we provide exactly that kind of infrastructure, and the community infrastructure levy will help local authorities to ensure that developers and landowners make their contribution to making these communities excellent, high-quality places to live.

David Taylor: My own county of Leicestershire is generally a sea of prosperity surrounding an archipelago of islands of difficulty. The Conservative-controlled county council has said that it believes it has had a reasonable settlement this year. Is the Minister satisfied that, following that decent grant settlement, the extra funds for those islands of disadvantage are actually being spent within those towns and villages in Leicestershire and not on pet projects for the council's own Conservative areas?

Hazel Blears: My hon. Friend knows that we are undertaking negotiations on the local area agreements in every local authority area. It is vital that, within those agreements, funds are targeted at the areas where we need to make the greatest progress. In addition, we have the working neighbourhoods fund, and I am absolutely determined that that will enable us to tackle worklessness in the poorest and most deprived communities, where people need extra help to get back into work.

Home Information Packs

Philip Davies: What recent assessment she has made of the effect of home information packs on the housing market.

Yvette Cooper: HIPs are already cutting costs and delays in delivering searches, as well as providing energy information across the market. The Government also commissioned an independent report by Europe Economics on the impact of HIPs on the housing market, including the impact of the first phase. The report found no evidence of any impact on transactions or prices, and concluded that the predicted impact on listings was short term and marginal compared with the wider factors affecting the market.

Philip Davies: Everybody knows that anyone who takes decisions can make mistakes. One of the things that the public do not like about politicians is that they never seem to admit to having made a mistake. A local estate agent told me this morning that the downturn in the housing market was at least partly caused by the introduction of HIPs, and there are many other experts in the field who will line up to criticise them. Will the Minister do her bit to restore people's trust in politicians by admitting that she got this wrong, scrapping HIPs and stopping defending the indefensible?

Yvette Cooper: May I say to the hon. Gentleman that his local estate agent is out of line with all major commentators on that? That is exactly why we commissioned Europe Economics to do an independent analysis and to seek the additional advice of Peter Williams, a former member of the Council of Mortgage Lenders and also a member of the National Housing and Planning Advice Unit, in order to do a full assessment of the overall impact on the market and of the particular impact of the first phase of introduction. It was very clear about there being no impact on transactions or prices and emphasised that the market was being affected by a much wider range of important factors, including the global credit crunch, which is of course having an impact on the market.

Phyllis Starkey: After the initial delays in commencing the home information pack programme, it seems to have rolled out now relatively trouble-free. National Energy Services, which is based in my constituency, has reported that it has registered 85,000 energy performance certificates since 1 August. Home condition surveys are not a mandatory part of HIPs, so what work is the Department doing to secure the views of those who have had those surveys done, perhaps with a view to rolling out the home condition surveys as a mandatory part of HIPs in future?

Yvette Cooper: My hon. Friend may be aware that the area trials looked into home condition reports, conducting detailed interviews with buyers as well as sellers. We await the final report, which will be published for further discussion about the way forward.

Lembit �pik: Will the Minister provide us with specific examples of actual house purchases that have been materially influenced by the content of home information packs? Will she arrange for any such case study examples to be placed in the Library so that we can make an objective analysis of whether they are doing any good?

Yvette Cooper: We have certainly been given anecdotal evidence from particular estate agents. In one case, for example, early information about land title had highlighted a problem with the sale at an early stage; without it, such information might not have emerged until much later in the process. Detailed assessments have been going on in area trials, as I mentioned, and we are also conducting ongoing monitoring. It will be important to link the energy performance certificates with the new green homes service, starting in the spring, which can target people with F and G-rated homes to provide serious financial support as well as clear advice on how to cut carbon emissions and fuel bills.

Grant Shapps: The Minister has already referred to the Europe Economics study that was conducted prior to rolling out HIPs for one and two-bedroomed homes. However, that study was carried out because the earlier area trials, to which the Minister has also referred, had never been published. Those were 4 million trials, whose results were promised to the House by the end of the year in June and July by the Minister herself and to the other place in October. Yet notwithstanding the 4 million cost, those results have never been published. Perhaps the Minister will tell us when those results will actually be published and how muchin addition to that 4 millionthe research by Europe Economics, which told the Minister what she wanted to hear, cost to commission?

Yvette Cooper: The two reports looked into completely different things. The Europe Economics report looked into the wider impact on the housing market and, in particular, at the roll-out to three and four-bedroomed properties. The area trials were conducted by Ipsos MORI in an independent assessment and have been looking into and following through individual cases, including those where a home condition report was involved. That is obviously not part of the three and four-bedroom roll-out, which was assessed by Europe Economics, as I said. We have not yet received a final report from Ipsos MORI. As soon as we do, we will, of course, publish it for scrutiny by the House.

Council Tax

Andrew MacKay: What estimate she has made of the average cash rise in band D council tax from April 2008.

Greg Hands: What estimate she has made of the average cash rise in band D council tax from April 2008.

John Healey: With permission, Mr. Speaker, I will answer questions 7 and 12 together. It is councils that decide the level of council tax. The Department publishes the actual figures each year after all authorities have made their budget returns in March. We will do so again, as usual, this year.

Andrew MacKay: Does the Minister not understand that people are not fools and they know perfectly well that it is not just councils that set council tax? They know that the Prime Minister is introducing another stealth tax here by imposing statutory regulations on local authorities without adequately funding them to carry out their responsibilities.

John Healey: We have an established system that recognises the net increase in any extra burdens and responsibilities that we place on local authorities, and that is reflected in the settlement. There is no reason why anyone should experience excessive council tax rises this year. The increase that we have made continues the real-terms increase for local government that we have seen over the last 10 years under this Government. It gives all local authorities the certainty of knowing for three years what they will receive, it gives them the greater flexibility and freedoms for which they have asked, and it makes clear that their ability to manage lies, in many ways, in their own handsin the efficiencies that they should be able to achieve for their council tax payers over the next three years.

Greg Hands: The Minister will know that Conservative- controlled Hammersmith and Fulham council is proposing a 3 per cent. cut in council tax for the second successive year. That compares with an average annual increase of 7.7 per cent. under Labour over the previous 12 years. Remarkably, although band D council tax will now be 863 a year rather than the 1,064 that it would be if Labour were still in charge, the Audit Commission's independent rating for the council's services has increased from three stars to four. Surely the Minister must join me in congratulating the council on its excellent performance.

John Healey: Of course it had a very good basisa Labour basison which to build. Residents of Hammersmith and Fulham may well be looking at council tax cuts, as they did in the current year, but they are also looking at library cuts, law centre cuts and cuts in vital voluntary sector groups.
	The hon. Gentleman refers to band D council tax figures, but fewer than one in six dwellings across the country are in band D. If he wants to swap figures according to political control, I must tell him that the average council tax level for all dwellings is 260 higher under Conservative authorities than under Labour authorities this year, and rose by more this year than last year.

Mark Field: The Minister's last statement cannot go unchallenged. As he well knows, that difference is simply because there are more properties in higher bands in Conservative authority areas. I hope he will apologise for misleading the House in such a way.

Mr. Speaker: Order. Inadvertently misleading the House would be better.

Mark Field: Inadvertently, naturally, Mr. Speaker.

John Healey: As the hon. Gentleman represents the City, one would expect him to be good with figures. I repeat that the problem with band D figures is that fewer than one in six properties are in band D. The right figures to use are those for the average council tax on all dwellings. Let me give them to the hon. Gentleman. The average council tax under Labour authorities this year was 938, the average under Conservative authorities was 1,200, and the average under Liberal Democrat authorities was 1,039. There have been higher rates and higher rises under the Tories than under Labour.

Agencies (Appointments)

Tony Baldry: Whether Parliament and local authorities will have a role in the appointment of members of the restructured regional development agencies, the Homes and Communities Agency and the Infrastructure Planning Commission.

Parmjit Dhanda: Appointment of members to the boards of those bodies and proposed bodies would be made by Ministers, on merit, in accordance with the Commissioner for Public Appointments' code and guidance. There are no current plans for either Parliament or local authorities to play a direct role in those appointments processes.

Tony Baldry: The Infrastructure Planning Commission will be unaccountable. It will be judge and jury in its own cause, and it will even decide the process by which local people can make representations on contentious planning issues. How can that conceivably be fair?

Parmjit Dhanda: I think the hon. Gentleman may have missed the boat. We had a good discussion about that during our deliberations on the Planning Bill. It is a shame that he is not a member of the Bill Committee. The purpose of the Infrastructure Planning Commission will be to streamline and speed up the planning process, and strong safeguards are built into it to ensure that consultation with local communities will be enhanced.
	What I have said is not directly related to the hon. Gentleman's question, but I hope it is helpful to the House.

Edward Garnier: Further to the question of my hon. Friend the Member for Banbury (Tony Baldry) about the bodies he listed, will the Minister say when the Secretary of State will reply to my letter dated 21 December setting out concerns in my constituency about the proposal to build a new town of up to 50,000 inhabitants on the Co-operative Society's almost 5,000-acre farming estate in the Harborough district? May I tell the Minister that that massive development, which might well come before the bodies my hon. Friend referred to

Mr. Speaker: Order. That is a wide supplementary question. Perhaps the hon. and learned Gentleman should bring up the matter in an Adjournment debate; that might be the best thing to do.

Henry Bellingham: When does the Minister next plan to meet representatives of the East of England Development Agency, my local regional development agency, and can he tell the House of one positive measure or initiative that it has carried out that would not otherwise have taken place?

Parmjit Dhanda: That has a slightly tenuous relationship with the main question about public appointments. However, I am always happy to meet members of any RDA, and I know from work I have done on the Migration Impacts Forum that they have done some good work in the hon. Gentleman's region. With regard to the initial question on public appointments, the hon. Gentleman will know that the Department for Business, Enterprise and Regulatory Reform is responsible for the body concerned, in terms of its representation and who is on it, and I think it has a good mix.

Energy-efficient Homes

Andrew Love: What assistance is available for people buying houses with energy ratings F or G to improve their homes.

Iain Wright: We announced the green homes service on 19 November last year. As my right hon. Friend the Minister for Housing said in an earlier answer, the green homes service will offer every householder who gets an energy performance certificate of an F or G rating for their home discounted or free help with energy-efficient measures. That help will come from a range of grants from both Government and industry under the energy efficiency commitment.

Andrew Love: Ratings F and G are the poorest, and therefore the most in need of the free help the Minister has outlined, but I understand that one in five of all homes in the country are rated F or G. How many homes does my hon. Friend think this scheme will be able to help over the next few years?

Iain Wright: I am grateful to my hon. Friend for that question. We anticipate that over the next three years 5 million more homes will benefit from discounted or free loft and cavity-wall insulation, and another 3 million homes from discounted or free low-energy light bulbs and energy-efficient appliances. The next phase of the energy efficiency commitment, running from 2008 to 2011, is expected to cut carbon emissions by 1.1 million tonnes and will save consumers about 10 billion in energy savings. That is good for home owners, and it is good for the environment.

Anne McIntosh: Being very careful how I pronounce F and G, may I ask the Minister what energy efficiency schemes exist to replace single-glazed windows with double-glazed windows in constituencies such as his and my own, where that can make a huge difference both to the comfort and, more especially, the energy efficiency of each individual home?

Iain Wright: A range of grants is available. The assistance available under the decent homes programme has meant that, since 2001, the number of non-decent homes in the social housing sector has been reduced. The replacement of single-glazed windows has been an important part of that effort. Warm Front, which has been a success in my constituency, is also a key tool in tackling fuel poverty. I am happy to write to the hon. Lady to provide further information.

New-build Social Housing

Alan Whitehead: What plans she has to encourage registered social landlords to build sustainable homes.

Yvette Cooper: We want to make homes more sustainable as well as more affordable. Homes built under the 8 billion affordable housing programme will now have to be built to code level 3 two years earlier than the rest of the market. We think it is important that where Government investment is involved, we lead the way in the work towards zero-carbon homes.

Alan Whitehead: I thank my right hon. Friend for that reply. Does she consider that the EcoHomes certification arrangements, which are set out by the Housing Corporation as a precondition for the funding of new-build by housing associations, will match the anticipated progress of the sustainable buildings code, and will she look into ways that the Housing Corporation might further incentivise more sustainable housing developments by housing associations?

Yvette Cooper: That is certainly something that we are continuing to look at, because we have said that we want all new homes to be zero-carbon rated by 2016. That obviously requires substantial changes to the way we design and build homes, and we want public sector investment to lead the way. The Housing Corporation is now using the code for sustainable homes; it has switched to that from using the EcoHomes certification, and that means that there is an opportunity to look not simply at energy efficiency, but at wider aspects of sustainability.

Mark Fisher: What plans she has for new-build social housing; and if she will make a statement.

Yvette Cooper: We expect to build 30,000 new social homes this yearthe figure will rise to 45,000 by 2010as part of an 8 billion programme of investment in more affordable housing over the next three years.

Mark Fisher: Although I welcome that, the Minister will have heard my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley) saying that the number of people on the council house waiting list in our city has risen to 8,000 and is rising fastby several thousand a year. Although I accept the interest in the market and in housing associations, and the better management of council assets that was mentioned in response to an earlier question, does my right hon. Friend understand that those measures are not meeting the need and that we are storing up problems for the future? Bad and unjust housing will lead to social problems and will undermine all the other Government policies in education and social justice unless we can find

Mr. Speaker: Order. I think that the Minister gets the point.

Yvette Cooper: Two significant issues need to be addressed; we need to increase both the amount and the quality of affordable housing in Stoke and in other areas across the country. That is why we introduced the multi-billion pound decent homes programme, which has already lifted 1.8 million children out of poor, cold and damp housingthat is hugely importantand why we are investing 679 million over the next three years in affordable housing for the west midlands, which is a 40 per cent. increase over three years in the amount of such investment. I believe that it will make a significant difference to meeting housing needs across the country.

Topical Questions

Peter Luff: If she will make a statement on her departmental responsibilities.

Hazel Blears: My Department is dedicated to devolving power to councils, communities and citizens, to building strong, cohesive communities, to delivering the Government's targets on building new homes and to preventing violent extremism.

Peter Luff: Last week, the Secretary of State's Department announced that it would impose more houses on the west midlands than local councils say they can cope with. It is also deciding the location of eco-towns entirely outside the planning process and, through the Planning Bill, it is removing the role of local communities almost completely from important decisions on major infrastructure projects. Does she understand that, as a result, people are feeling powerless and dangerously cynical about local democracy?

Yvette Cooper: I have to say to the hon. Gentleman that I simply do not agree with his characterisation of the way in which either the housing process or the planning process works. It is important that local communities are involved in deciding what kinds of homes need to be built, and where homes need to be built, in their areas. That is why we have made changes to the planning policy statement for housing. Councils should be using those new powers to support development in their communities, but they also must recognise that we badly need more homes in this country to meet the needs of families in overcrowded accommodation, families on council waiting lists and future first-time buyers. It is irresponsible for Conservative Members to campaign against more affordable housing when it is desperately needed across the country.

David Kidney: Do Ministers agree that the local authority business growth initiativeLABGIhas been phenomenally successful in supporting local authorities such as Stafford borough council and Staffordshire county council in encouraging new business start-ups and in rewarding them for success? This is currently a three-year scheme, but what discussions are Ministers having with their colleagues in the Treasury to mainstream the scheme and to keep it as generous as it is to those who have successfully bid for assistance?

John Healey: My hon. Friend is right about the importance of the scheme. He is also right to say that we should be doing more to recognise and reward local authorities that play a part in expanding the business base, and therefore the jobs and prosperity, of their areas. The short answer to his question is that detailed discussions have taken place for some time with the Treasury. They led to confirmation in the comprehensive spending review that money would be set aside in the second year of this CSR period to incorporate LABGI into the design of the business rate system. It is clear that the trial with the stand-alone scheme has demonstrated its importance. We must make it an integral part of the system for the future. We will then increase, and have provision to increase, the amount of money going through LABGI in the third year of this CSR period. I encourage hon. Members on both sides who support the principle of the scheme to work with us to design a scheme that can last for the long term.

Paul Burstow: Earlier in Question Time my hon. Friend the Member for Carshalton and Wallington (Tom Brake) raised the issue of housing subsidy. Will the ministerial team give serious consideration to how they will explain to my constituents who are council tenants that, on average, every one of those council tenant households is paying 1,473 a year in negative subsidy back to the Government? How can it be fair for some of the poorest in our society to contribute in that way to other poor people in other parts of the country?

Yvette Cooper: I am sorry that the hon. Gentleman missed what was a sensible discussion of the housing revenue account system and how it works. There is an element of redistribution in the account, and that is important because council housing has been funded in different ways historically and there are huge variations. There are also huge variations in need, so it is right that the system has an element of redistribution. However, there are problems with the system as it stands, and that is why we are conducting a serious long-term review and piloting different approaches. For example, we are piloting ways for councils to opt out of the housing revenue system so that they can better manage their assets in the long term.

Roberta Blackman-Woods: Will my hon. Friend ensure that the implementation teams that are moving local authorities, such as those in County Durham, towards unitary status are required to produce a proper information strategy for local residents so that they are kept fully informed of the implications of change, the time scales and the significant milestones that the Government require local authorities to meet on the way?

Hazel Blears: I thank my hon. Friend for raising the important issue of the process that will need to be undertaken to implement the proposals. It is important that local people are kept fully informed about the proposals as they are developed and that there is complete openness and transparency in that process. My experience of any big change process is that it is important to get on with it. The sooner it is done the better, but it has to be done rigorously and properly. I have no doubt that my hon. Friend will continue to monitor it, as will I.

Eric Pickles: I am sure that the Secretary of State will have been saddened by the evidence presented at last week's inquest into the death of baby Rhianna Hardie, who was scalded in a tragic accident caused by a faulty thermostat. The coroner noted that the Health and Safety Executive thought a similar fatality in 2002 sufficiently serious to bring it to the attention of the predecessor Department, the Office of the Deputy Prime Minister. However, the Department did not pass on that warning to local authorities. Has the Secretary of State been able to ascertain why the ODPM did not pass that information on to local authorities?

Hazel Blears: This matter is of the utmost concern. It was a terrible tragedy, although thankfully rare, and our sympathies are very much with Rhianna Hardie's family. The hon. Gentleman is right that there was a similar case in 2002, and consideration was given then to whether a new British standard should be introduced for immersion heaters to ensure that it did not happen again. All new installations now have to have a secondary thermostat to prevent overheating. There is also a full review of building regulations to look at the issue, which started last summer and is an ongoing process. We will consider the comments made by the coroner in the latest case very carefully, because it is important to have clarity between my Department and the Health and Safety Executive on responsibilities and lines of communication. I will personally ensure that we consider the comments and, if there is action to be taken, that we ensure that the right authority takes it.

Eric Pickles: That is very helpful. It might also be helpful if the Secretary of State would consider placing in the Library the correspondence between the HSE and the ODPM on the issue. In the course of the review, it might be helpful to look at the protocols for her Department on how information from the HSE is treated. I appreciate the point that she makes about the building regulations, but given that we are talking about 3.5 million boilers, can she tell me whether she intends to issue guidance to housing authorities on what checks should be made on those thermostats? Finally, what assessment has been made of the risk of a reoccurrence of such an accident?

Hazel Blears: I do not want to pre-empt the review of the building regulations that is being undertaken to consider that matter, which will be comprehensive and thorough. One reason why I want to get to the bottom of the relative roles of the HSE and my Department is that it has traditionally been the role of the HSE to communicate directly with housing providers rather than that of the ODPM or, now, of the Department for Communities and Local Government. Housing providers are under a duty of care to their tenants but, as I understand it, they are also under a duty to report to the HSE rather than the Department. I want to have a thorough look at that and am happy to confirm that I will put as much information about the issue as I possibly can into the House of Commons Library. As I said, the coroner said that such tragedies were, thankfully, extremely rare. Obviously, such things are an absolute tragedy for any family to which they happen and we must make every effort to ensure that such an occurrence does not recur.

Alan Simpson: What success has the Minister had in persuading her ministerial colleagues to look at the introduction of feed-in tariff legislation such as that which is being applied elsewhere in Europe? In Germany, in particular, such legislation has been successful in putting citizens at the heart of driving their sustainable cities agenda and providing sustainable and affordable energy in their own homes.

Hazel Blears: My hon. Friend has pursued this issue with assiduitythat is probably the best word. [Hon. Members: Perspicacity.] Or perhaps perspicacity isI think I shall say that he has done so with a great deal of energy and commitment. He has raised an important issue that appears to be technical but is quite substantial. An interesting matter to pursue is not simply the feed-in tariff system but the way in which local people, local neighbourhoods and local communities can contribute to that important agenda. If he looks at the recent planning policy statement on climate change, he will see some welcome statements about the role of communities in terms of combined heat and power and on some of the other issues that he has pursued.

Laurence Robertson: The Government will be aware of the sustained rainfall experienced by many parts of the country, including my own, which was devastated by floods last year. Although the situation is not that bad yet, more rain is predicted. People's homes are being flooded, as are roads and fields. Given that fact, is it not rather insensitive for the regional assembly to submit its draft regional spatial strategy to the Government suggesting that thousands of extra houses should be built in my constituency? People need houses, but do they want them where they cannot get insurance, where they will flood or where they will cause other people's property to flood? The regional spatial strategy document needs to be thrown straight back at the assembly and rejected outright.

John Healey: The regional spatial strategy will be studied, examined and dealt with in the usual way. The hon. Gentleman will be aware that we have recently tightened up the planning rules on flooding, something that Sir Michael Pitt looked at and reported on just before Christmas. Like the hon. Gentleman, I am conscious of the worries that were felt overnight and have continued this afternoon in Tewkesbury and some other areas, particularly in the west country. He and the House might like to know that as at 14.16 today, 63 flood warnings and no severe flood warnings were in place, while nine all-clears had been given.
	The risk of flooding is high in some areas, but, by and large, water levels are generally at about the levels that are considered normal for this time of year. Nevertheless, the hon. Gentleman's council has rightly been on high alert and has been active overnight, as have a number of other councils. Central Government and the Department stand ready to help if and when they are required.

Julia Goldsworthy: Can the Secretary of State explain why the nine regional fire control centres are being built on such a huge scale? Is the embarrassing truth that her Department failed to take into account shift working when determining the national requirements that it set for building them?

Parmjit Dhanda: No, not at all. The reason that we are building these centresthe hon. Lady will be aware of this, because of her experience in her regionis that the current control centres have nothing like the capacity of the new ones. Surely, like me, she would like to see [ Interruption. ] If she would listen to me for a moment, I shall explain. Surely she would like to see a system in place whereby the closest fire engine is directed to the scene of the incident, regardless of where it is from, and whereby new technology is available through satellite navigation to get the engine there as quickly as possible.
	I accept that the centres are bigI recently visited the ones in the south-west and the east midlandsbut they are large because they have to be able to cope with emergencies, and extra capacity and more staff are sometimes needed. I had a meeting with the firm EADS Defence and Security Systems today

Mr. Speaker: Order. I call Adam Holloway.

Adam Holloway: The leader of Gravesham council has told me that the council was not consulted at all about the Thames Gateway project's move into the new Homes and Communities Agency. When Ministers spoke about local community involvement in the process, is that what they had in mind?

Yvette Cooper: We have had extensive consultation with local councils and other organisations across the Thames Gateway, as part of the overall delivery programme. The HCA is taking over all the Department's functions on housing and regeneration across the country, including the major growth areas such as the Thames Gateway. The Department will continue to support the cross-departmental work in respect of transport and other functions but, as we have always said, local councils must take the lead in local areas and communities. That will enable us to get the best results in delivering the jobs and homes that are already coming into the Thames Gateway.

James Gray: The Secretary of State will know about the illegal Gypsy encampment at Minety in my constituency. It was recently given 18 months leave to remain while Wiltshire county council assessed the need for such encampments across the area. However, how can the council reasonably make such an assessment, given that very large numbers of Gypsies in Ireland and Romania are reportedly waiting to come to England as soon as places are available? The more Gypsy places that Wiltshire county council provides, the more quickly they are filled.

Iain Wright: The hon. Gentleman said that Gypsy and Traveller accommodation needs were being assessed in his area. That is the right way forward, and the vast majority of local authorities have completed their assessments. The independent task group on site provision and enforcement published its final report to Ministers last month, and it concluded that the Government's policy on provision of sites for Gypsies and Travellers was sound. The key is that such provision must be enforced properly, and we need more authorised sites to avoid the risk of antisocial behaviour and disruption throughout the larger community.

Planning (Location of Hazardous Sites)

Bob Spink: I beg to move,
	That leave be given to bring in a Bill to require the introduction of binding guidance regarding minimum distances between developments classified as Control of Major Accident Hazard sites and other specified types of building; and for connected purposes.
	This Bill seeks to improve protection for communities across Britain from the new development of potentially dangerous industrial sites. It will ensure increased safety by giving the Health and Safety Executive a framework for COMAH plant siting decisions, thereby improving the consistency of such decisions and affording a predetermined level of protection for communities.
	As if we in Castle Point had not had enough, Oikos registered on 21 December a new application for biodiesel and glycerine plants. The plants, which are expected to produce 163,500 tonnes a year, are sited very close to houses. Feed stocks would be imported from ships in the Thames and there would be massive on-site storage of oils, fats, reacting agents and end products. The local council and the HSE will be working closely with me and with the organisation People Against Methane to protect our community, and residents will be fully consulted about the Oikos proposals.
	I have fought to defend my constituents from the massive risk posed by Calor's proposals for a liquefied natural gas facility next door to the Oikos site. Calor wants to import around 5 per cent. of the UK's total LNG needs and to store about 100,000 tonnes on site. The LNG would be offloaded from ships by means of a boom arm on a jetty on a waterway where activity is increasing massively, thanks to the new Thames Gateway port development just downstream and the Oikos proposal.
	Calor's plans were withdrawn as a result of a strong campaign in this House, inputs from the HSE and the Environment Agency, and local efforts by People Against Methane. The Canvey Island Independent party's huge petition, which I presented in this House, was also most helpful. We have put politics aside in Castle Point and worked together to defeat the Calor proposals, and we shall do so again, but Calor says that it will reapply this year. I shall continue my fight to protect my constituents.
	We were told that the Buncefield depot was totally safe, but it turned into the biggest fire in western Europe since world war two, as my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) explained to the House last week. A similar fire, but involving LNG rather than petrol, would make Buncefield look like a village bonfire night party. I congratulate my hon. Friend the Member for Hemel Hempstead (Mike Penning) on his excellent debate last weekhe is doing a superb job of fighting for his constituents. He described one of his constituents' homes after the explosion as:
	blown to smithereens. It looked like someone had dropped a 1,000 lb bomb next to his house. I have visited the site. The house is goneit does not exist.
	He went on to say:
	May I also praise him
	that is, me
	for his quick response before Christmas when the hydrocracker at the Coryton refinery exploded?...I know the fears that exist, and I am conscious that my hon. Friend did not go in the opposite direction; he went straight down to see the firefighters to ensure that they, too, were looked after.
	To answer my hon. Friend's question, when the first explosion took place at Buncefield, the damage occurred several kilometres away...he will find that because there was nothing structurally to prevent the explosion spreading outwards, or the subsequent suction inwards after the oxygen had been used up, properties...several kilometres away, were subject to serious structural damage. One school in St. Albans had its central heating boiler sucked up through the flue, which blew up boilers throughout the school...That is the sort of damage that occurs in such explosions.[ Official Report, Westminster Hall, 9 January 2008; Vol. 470, c. 75WH.]
	Thus, we see graphically the destruction caused even several kilometres away from such an incident.
	George Whatley of PAM, who originally suggested my Bill, used a satellite navigation system to measure the distance separating the Calor site and homes on Canvey. It is precisely 200 yd. That is totally unacceptable, but there are no official separation limits for COMAH plants; hence the Bill that I am introducing today. An escape of LNG would vaporise and form an unstable, unconfined, highly combustible cloud which, on ignition, would explode and burn at extremely high temperatures, destroying everything in its path. According to the fire service, whereas the Buncefield petrol fire was easily contained, there is no way to contain or control an LNG fire; the fire service would just clear up the carnage afterwards.
	International evidence on LNG explosions is legion. Tim Riley's documentary film, The Risks and Dangers of LNG, and the 2003 Californian study predicting up to 70,000 casualties from an LNG accident or terrorist attack, graphically set out the implications. The Buncefield inquiry led to an HSE investigation, which concludes:
	Clearly we have a poor scientific understanding of the mechanisms which led to the vapour cloud explosion at Buncefield, and we accept that installations storing other substances could present this type of hazard, for example bulk LPG storage, and other flammable liquid storage.
	The investigation also reveals a fifteenfold increase in unconfined vapour cloud explosions over the past decade, and it challenges the current orthodoxy on the scale of risk to local communities that are adjacent to large petrol, liquid petroleum gas and LNG sites. The HSE is therefore reviewing its safety and planning advice on the siting of such plants.
	United States federal regulations for LNG facilitiesCFR 193federal safety standards and the US National Fire Protection Association lay down that vapour gas dispersion distances must be calculated to determine how far downwind natural gas vapours could travel from an onshore LNG facility and still remain flammable. They show that a fire would burn with intense heat, so LNG plants must have thermal exclusion zones.
	The Canvey island site involves additional risk, with LNG transfer from tankers on the Thameson the water. Distinguished professor Jerry Havens and others have serious concerns about the vulnerability of massive LNG tankers, which could be engulfed in a fire and would be unable to fight that fire. The risks of spills on to water are spelled out in the US publication, Business Briefing: LNG review 2005:
	there would be little or no control over the extent of liquid spreading and the consequent rapid burning or vaporisation of the gas.
	A 2004 report by Sandia National Laboratories in the United States concluded that
	cascading failure of LNG vessel containments by this mechanism cannot be ruled out,
	which would result in total loss of the tankers.
	A US fact sheet Liquified Natural Gas (LNG) Energy Justice.net/natural gas states that an accident or terrorist attack on an LNG tanker could cause
	major injuries and significant damage to structures a third of a mile away and could cause second-degree burns on people a mile away.
	A congressional panel expressed similar concerns in 2004; Rear-Admiral Gilmour was reported in Factiva as saying that the minimum distance for an offshore LNG terminal ought to be about 10 miles. Castle Point does not have the luxury of 10 miles, several kilometres or even one mile. The distance separating our homes, schools and workplaces from the Calor site is precisely 200 yd. Canvey faces significant additional risks from terrorismit suffered a terrorist bomb attack in the 1980s. The site is also well below sea level, creating major flood risks and increasing existing ones.
	My Bill would increase and formalise the protection afforded to communities and give clarity and certainty to applicants, the HSE and planning authorities, saving time, expense and much community anguish. If the Government listen, they will amend the Planning Bill to accommodate the sensible and necessary provisions in my Bill. As it stands, the Planning Bill will cause more difficulties; under it, the location of a dangerous plant will be decided by an unelected quango, the infrastructure planning commission. The IPC will operate behind closed doors, removing democratic legitimacy as well as involvement by local councils or even the Secretary of State.
	The Planning Bill fails conspicuously to give the necessary procedural rigour for the IPC to deal with the location of hazardous sites. That causes great concern to the Campaign to Protect Rural England and other excellent environmental organisations seeking, like me, to defend the public interest. I commend my Bill to the House.
	 Question put and agreed to.
	Bill ordered to be brought in by Bob Spink, Mr. Peter Lilley, Dan Rogerson, Patrick Mercer, Mr. Christopher Chope, Mr. Dai Davies, Dr. Evan Harris, Mr. Andrew Love, Mr. David Gauke, James Duddridge and Mr. James Clappison.

Planning (Location of Hazardous Sites)

Bob Spink accordingly presented a Bill to require the introduction of binding guidance regarding minimum distances between developments classified as Control of Major Accident Hazard sites and other specified types of building; and for connected purposes: And the same was read the First time; and ordered to be read a Second time on Friday 6 June, and to be printed [Bill 55].

Health and Social Care Bill  [Ways and Means]

Ben Bradshaw: I beg to move,
	That, for the purposes of any Act resulting from the Health and Social Care Bill, it is expedient to authorise the charging of certain fees by the Office of the Health Professions Adjudicator.
	The motion is in the name of my right hon. Friend the Financial Secretary to the Treasury. A Ways and Means resolution has been deemed necessary by the House authorities to allow the office of the health professions adjudicator, the new independent adjudicator created by the Health and Social Care Bill, which is currently in Committee, to charge fees to the regulatory bodies whose fitness to practise cases are to be referred to the office for adjudication. The motion is being moved now because the Bill as introduced did not require a Ways and Means resolution.
	The office of the health professions adjudicator will adjudicate on fitness to practise cases involving doctors, those in professions regulated by the Opticians Act 1989 and any other professionals whose regulatory body decides to use its services. At present, the General Medical Council and General Optical Council must meet the costs of the adjudication functions exercisable by their respective committees. The Health and Social Care Bill will transfer those functions to the office of the health professions adjudicator, so those two bodies will no longer have to meet those costs. We have therefore tabled a Government amendment to allow the office of the health professions adjudicator to charge fees to the General Medical Council and General Optical Council. We omitted such a clause from the Bill on its introduction so that we could complete detailed discussions with the General Medical Council about how the new adjudication body should be funded.

John Bercow: I am not unduly perturbed by what sounds so far like a wonderfully Sir Humphrey statement, but I must sayI suspect that other Members entertain similar concernsthat we do not want an entirely open-ended provision. Can the Minister offer the House any indication of the likely scale of the costs that will be incurred, and in what period they will be incurred?

Ben Bradshaw: I certainly can; I had intended to say something about that in a little while. The hon. Gentleman may like to speak to his spokespeople on the Front Bench, who argued loudly in Committee that the independent adjudicator should be even more independent, and freer to do whatever he or she likes, which caused great concern to the GMC and others in relation to the ability of the House or the Secretary of State to ensure that the fee levels are reasonable.
	There are two ways in which the aim will be achieved. First, the new adjudicator will have to consult on the level of any fee that he or she wants to levy. Secondly, those fee levels will have to be approved by regulation and in consultation with the Secretary of State. Given those safeguards, I hope the hon. Gentleman is reassured that the costs of the new adjudicator will be broadly similar to the current costs incurred by the GMC and the GOC.

John Bercow: I am partly reassured by what the Minister has said. I am grateful to him for his clarification, but as he refers to a prospective order-making power, may I ask the obvious supplementary questionwhether the order-making power will be subject to the negative procedure or to its affirmative counterpart? It is rather important to know which.

Ben Bradshaw: My understanding is that it will be the negative procedure. I will write to correct that if I am wrong.

Humfrey Malins: I declare an interest as a part-time panellist for the General Medical Council, appointed by the House some time ago. The question of fees troubles me slightly. Can the Minister confirm specifically that the House will have an opportunity to discuss the level of those fees? Can he say who is to set them, roughly how much they will bethe scale involvedand who, ultimately, will pay? It sounds a little like a stealth tax. Will doctors pay? Will the General Medical Council pay? Where does the bill end up?

Ben Bradshaw: The regulatory bodies such as the GMC, the GOC and possibly others that come under the independent adjudicator's remit will pay the fees, based on the work load of the independent adjudicator in any one year. Individual doctors now pay a levy or a membership fee to the GMC. They will continue to do so, and out of the funds that that raises, the GMCor the GOC, or other appropriate bodywill pay a fee that will be set after consultation with everybody, including Members of Parliament, and approval by the Secretary of State in laid regulations.
	We are doing some independent research with the GMC into its current costs. It is rather difficult to disaggregate the cost of the adjudication process from the overall costs that the GMC incurs, but our estimate is about 11.5 million a year. That is the figure that we are working on. That is the current cost, which is met by medical doctors and others who are members of those organisations and pay their annual subscription to those organisations.
	The new clause about fees must be authorised by a Ways and Means resolution. The House authorities, I understand, reached this conclusion because the new office of the health professions adjudicator will be for the benefit of the general public, rather than just for the benefit of the professions regulated by the GMC and the GOC. In addition, the fees charged by the OHPA will cover all of the body's costs, rather than costs incurred before a day to be specified in regulations or costs incurred for a purpose specified in regulations. That is the difference between the fee-charging powers of the Healthcare Commission and the future care quality commission. In other words, the fees will be calculated by reference to the total expenditure of the OHPA, rather then to the individual service that it is providing to an individual organisation.
	It has always been our intention that the regulatory bodies in receipt of OHPA's adjudication services should pay for the adjudication of their cases. As I said, at present the costs are borne by the health care professional regulators, and we see no reason why that should change. The fee will be charged on an annual basis rather than on a case-by-case basis. As I also said, regulations will be made by the Secretary of State, setting out the process through which the level of the fee is to be determined. I am confident that the funding arrangements set out in the new clause are fair and appropriate.

Stephen O'Brien: In speaking to this Ways and Means resolution, I am mindful of the words of my late, great colleague on the Conservative Benches and champion of the rights and duties of this House, the former Member for Bromley and Chislehurst, Mr. Eric Forth. He noted:
	It is always a great pity that these apparently innocuous Ways and Means resolutions attract such relatively little attention from colleagues in the House, because they are, of course, a very important part of what remains of the House's influence on the sort of measures that flow from legislation. I should like to think that in some ways Members would be more interested in Ways and Means resolutions than in many other aspects of the Bills themselves.[ Official Report, 15 November 2004; Vol. 426, c. 1064.]
	I pay tribute to the fact that the Conservative Members who sit on the Committee considering this Bill are present for this Ways and Means resolution debate; apart from the Minister, only the Parliamentary Private Secretary and the Whip are on the Government Benches. That is a shame. Furthermore, it is notable that the Minister chose not to answer the direct questions put to him, quite properly, by my hon. Friends the Members for Buckingham (John Bercow) and for Woking (Mr. Malins); my hon. Friend the Member for Woking brings expertise to this subject from his past.
	The Minister has just said that the House authorities deemed it necessary to bring this stand-alone, separate Ways and Means resolution to the Floor of the House today. I remind the House, however, that that would not have been necessary had the Government got their act together sufficiently in advance of publication and the commencement of the Bill's proceeding through the House. They should not have left outstanding a series of open-ended negotiations so that the resolution could not be recognised in the Bill when it was first published.
	According to House rules, when the Government table a new clause a Ways and Means resolution is necessary if the new clause would raise a new fee structure or a taxand I shall argue that new clause 7 does. The Government are responsible for taking up the time of the House on this matter, which is important, given that we are already in Committee and considering the very issues to which it relates.
	This debate arises from Government new clause 7. The Committee has not yet debated or voted to amend the Bill through the new clause. It is therefore valid to ask whether we should take up the House's valuable time at this point of the Committee's proceedings.

Humfrey Malins: Is my hon. Friend saying that the issue has not yet been fully debated in Committee? That comes as a great surprise, particularly as I understand that many Labour members of the Committee are not here today. Have not Labour and Conservative Committee members already had a full opportunity to debate the new clause and its financial implications? If they have not or are not going to, that is astonishing.

Stephen O'Brien: I am sorry to have to confirm to my hon. Friend that he has to be astonished. We have started the Committee's proceedings and taken the new form of oral evidence, but new clause 7 was tabled at a such a point that it does not even come up for consideration by the Committee for some time.

John Bercow: Irrespective of whether the programme motion will allow for a debate on that new clause, may I raise with my hon. Friend and, through him, the Minister a wider concern that has been a consistent hobby-horse of mine in recent years? If the matter is to be effectively implemented by regulationand I do not cavil at thatis it not a good idea, and should not Parliament demand, that we as a House have sight of a draft version of the regulations before the final passage of the Bill? Otherwise, we are voting for a pig in a poke.

Stephen O'Brien: With his usual clarity and unique way with words, my hon. Friend puts his finger right on a point that I shall come to. I hope to confirm that he is spot on.
	Notwithstanding the fact that we have not reached the point in Committee where we even know whether new clause 7 will be voted on and passed, I note that had the Government managed to complete their negotiations with the regulatory bodies before Second Reading, so bringing to the House a Bill in much better orderthey have already tabled 53 amendmentsthis matter could have been dealt with on Second Reading. Given the absence of the clause on Second Reading, we are now in the impossible position of being called to vote on fee-charging powers that we have not had the opportunity to discuss. That is somewhat contemptuous and not in line with the Prime Minister's assertion, just a few months ago, that he would hold this place in much higher regard than the Prime Minister whom he succeeded. By the Government's own admission, they found themselves still in late negotiations with the General Medical Council long after the Bill had found its way into the House's calendar. The resolution has either been proposed too early or proposed too late, but it certainly should not be taking up the House's time as it is. However, that is what we are faced with, so we must deal with the facts as we find them.
	To understand the context in which the resolution is being considered, I remind the House that the office of the health professions adjudicator is a new body that is being set up under the Bill to take over the adjudication of fitness to practise panels from the GMC and the General Optical Council. It is being established in response to Lady Justice Smith's recommendations in the Shipman inquiry. Under the new procedure, we had the benefit of her being able to give us direct oral evidence, and it was incredibly persuasive and powerful. I dare say that the whole House will join me in agreeing that we, as a legislature, never want a repeat of the appalling Dr. Shipman's atrocities. There is a question mark over the creation of the OHPA. The GMC noted in its written evidence that, by any objective measure, its adjudication track record is extremely good, and that over the past two years, 2006-07, there had been 2,480 hearings regarding doctors' fitness to practise, with all decisions challengeable by reference to the High Court.

Mr. Speaker: Order. The matter before us is the charging of fees, not the matters he is speaking about just now.

Stephen O'Brien: I am grateful to you, Mr. Speaker. Of course, I will do my very best to ensure that I stay within your ruling. I was simply trying to demonstrate that the current body is not doing a bad job at the momentindeed, only 0.4 per cent. of its rulings have been challenged in the courts. The successor body, with the functions that the Government are seeking to put in place and for which they want a new form of fee charging, is absolutely dependent on the resolution being passed.

Humfrey Malins: The more I listen to my hon. Friend, the more I feel we should take the view that the proposal to charge fees through this new body should be scrutinised much more carefully before we proceed any further. I can confirm that the performance of the GMC, in terms of its hearings and so on, has been much more efficient recently. Where, therefore, is the argument that we should be giving the Government carte blanche to charge a whole lot of fees through this new body without the matter having been properly debated

Mr. Speaker: Order. Once again, let me say that the bodies concerned can be discussed in Committee, but we have a rather tighter matter before us and we should be debating that.

Stephen O'Brien: I am grateful to you, Mr. Speaker. The fact that we have to vote on this now means that we must raise the issues about where fee charging is dealt with. I recognise that that is the definition of your ruling. Absolutely germane to what my hon. Friend the Member for Woking (Mr. Malins), with all his experience, rightly says, is the question of whether what two bodies carry out, through two distinct functions, in relation to a matter that was previously dealt with under one body, has a significant bearing on the costs and amounts that may be charged through them as a tax, not necessarily falling on general taxation powers. Perhaps it would have been helpful to have had the benefit of the opinion of the Chairman of the Select Committee on Health; it is a shame that he is not here.  [ Interruption. ] Indeedas he is a GMC member.
	Critical to our decision on the resolution is whether we have resolved an issue of serious contention in Committeewhether the new bodies being set up under the Bill, not just this body but other bodies, are truly independent of Government. As an indicator of the Government's intent, if those bodies are truly independent, we would expect them to be able to charge a fee. I have to say that based on all the evidence so far in Committee, it has not yet been established that they are truly independentfar from itand we have criticised them for that. If they are not independent, we are not considering a fee but a substitution of vicarious taxation of the members of professions covered by the new body for recovery of costs.
	We have to consider who might be affected by the passing of this resolution. For the doctors, optometrists, dispensing opticians, student opticians and optical businesses of this country, the fees proposed in the resolution will be garnered from the General Medical Council and the General Optical Council, as the Minister has admitted. That will have a direct impact on the fees charged by those bodies to their membership. The full GMC registration fee on the medical register will rise to 390 per annum with effect from April this year, having been frozen at 290 per annum since 2002. GOC registration stands at 169 per year. My hon. Friend the Member for Buckingham (John Bercow), whom I see is still just in the Chamber, raised the essential question of what the costs were, and we heard that there will be a massive increase. According to the Minister, it will be 11.5 million, which, by a quick calculation, means an extra 100 per doctor. It is that sort of detail that my hon. Friend was trying to winkle out of the Minister to find out what extra costs to constituents and the professional community we are truly sanctioning.
	I recognise your strictures to stay in order according to the resolution's narrow definition, Mr. Speaker, but the other serious unanswered question is that we have not seen the secondary legislation upon which the resolution depends, even in draft. As my hon. Friend the Member for Buckingham said, that makes it a bit of a pig in a poke. It certainly means that we are flying blind.
	The other thing absent from our consideration of the resolutionthe final financial point that needs to be addressedis the question of VAT. Currently, neither the GMC or GOC is registered for VAT, partly because of their charitable status; I hope that that is not news to hon. Members. However, the new office of the health professions adjudicator will immediately slap a 17.5 per cent. uplift on the fees payable to it, irrecoverable against the fees paid to the GMC or the GOC. The Minister should explain fully how the resolution will affect that arrangement. Where will the VAT loss fall, and upon whom?
	We have a serious worry about the costs included in the Bill that are, by virtue of this resolution, yet unknown. In addition to what is currently proposed to ensure that a fee is passed on vicariously to the members of the various professions involvedbecause it is no longer an independent body in our view, we consider this to be a tax-raising powerthe Minister told us in Committee on Thursday that the establishment of the care quality commission as a successor body to the Healthcare Commission, the Commission for Social Care Inspection and the Mental Health Act Commission will cost 7 million, as outlined in the regulatory impact assessment. The transition cost will be 140 million, which includes the costs of redundancies, estate rationalisation and a planned reduction of operating costs. Creating responsible officers will cost between 3.1 million and 16.7 million per year, and extending direct payments will cost 1.5 million to 8 million a year. The social enterprise investment fund will cost 98.1 million and the health in pregnancy grant is a one-off payment.
	So, in addition, we have the ways and means resolution, which is the only means whereby the Government can press ahead with insisting that the fees chargeable by the OHPA are recoverable. It effectively constitutes a new tax on members of the professions I have listed. The resolution appears ill prepared and panicky, and has been tabled after the Bill was introduced.
	The Bill also presents a significant worry because the money for pregnant women is to be paid at the end of the second trimester. All the evidence that we have established shows that, despite the Prime Minister's assertions, the only benefit to be derived for better diet is before conception and in the early weeks of pregnancy. That contrasts with the Prime Minister's comments. Notwithstanding that we are discussing 175 million in the first year

Mr. Speaker: Order. Once again, the hon. Gentleman is going wide of the resolution. He must get back to itit is very narrow, so it should not be too difficult for him.

Stephen O'Brien: Certainly, Mr. Speaker.
	Let me put the resolution in context to understand the way in which it would work. The Government have not yet set out the rationale for establishing the body to which the resolution relates. We have a problem with timing as well as the substantive problem.

Stephen Crabb: Is my hon. Friend aware of any genuine consultation on new clause 7 in which the Government have engaged with the professions?

Stephen O'Brien: I am grateful to my hon. Friend and glad to have the opportunity to point out that, unlike the Government and the Liberal Democrats, despite their assertions, Conservative Members are proud that we have ensured that someone who represents a Welsh constituency will serve in Committee, given that the Bill relates to so many powers that Welsh Ministers exercise in relation to the Mental Health Commission. I am glad to say that my hon. Friend the Member for Preseli Pembrokeshire (Mr. Crabb) will be looking out for his constituents and everyone in Wales in Committee. No other party chose to nominate Welsh Members of Parliament to the Committee.
	My hon. Friend's question about consulting the professions is crucial to whether we should pass the resolution and whether we should be called upon at this stage to debate it. Such consultation does not apply only to England but to Wales. Has consultation been properly framed and passed on to Welsh Ministers, who will make decisions that replicate, to some extent, those made in England, to apply to the medical profession in Wales? My hon. Friend asked a germane question and I hope that the Minister will tell us the extent to which consultation has taken place with professional bodies, especially the GMC, to establish whether the resolution is the right way forward and whether the professional bodies are looking forward to being a proxy, vicarious tax collector for the Government to recover fees for the new OHPA, the establishment of which has not yet even been agreed.
	I have a final series of questions for the Minister to enable us to make a decision on the resolution and maintain the proper challenge that my former colleague the former right hon. Member for Bromley and Chislehurst issued on such resolutions. Why were matters not sorted out in time for Second Reading? Why is it suitable for the House to table a Ways and Means resolution on an aspect of the OHPA that neither it nor the Committee has had an opportunity to debate? What assurances can the Minister give that the resolution is not a blank cheque, given the OHPA's lack of independence, which we have already observed in Committee by reference to another bodythe care quality commission, which is also being set upthe absence of draft regulations on new clause 7 and of cost control measures in the Bill? The Minister did not mention cost measures when he outlined at the outset of our short debate what he believed to be appropriate.
	Will the Minister also reassure the House that, in accepting the resolution, we are not creating a huge liability for doctors, optometrists, dispensing opticians, student opticians and optical businesses? How will the resolution operate given the different VAT status of the bodies involved? Why does not the money resolution cover at least part of the resolution that we are discussing?
	We have an opportunity to test the Government. Are we to be disappointed or are we in for the parliamentary shock of getting genuine answers to key questions, without which the House should not be contemptuously steamrollered into supporting the resolution?

Norman Lamb: I can assure those who are waiting patiently for the next debate that I will be very brief. Participating in my first debate on a Ways and Means resolution, I have to confess that I am left feeling completely confused, particularly after the wide-ranging speech of the Conservative spokesman. However, I share the questions that he put to the Minister, particularly those seeking the justification for why we are in this situation. Despite the Minister's best efforts and what the hon. Member for Buckingham (John Bercow) said, Sir Humphrey liked to put his case across in a calm and measured way. The situation smacks of chaos and confusion.
	The Minister said that the provisions were not dealt with originally because of detailed discussions with the GMC. Is that really the beginning and end of the matter? Did he anticipate that he would be required to come to the House with the resolution in order to satisfy proper procedures? Reference has also been made to the need for the Committee to see the draft resolutions during the Committee stage. Will the Minister ensure that they are available, so that the Committee and the House know exactly what they are voting to permit?

Angela Browning: Although it is true that the Committee has not yet dealt with new clause 7, reference has been made to fees and costs in relation to the regulatory impact assessment, which the Minister has made available to the Committee. The figures for the savings from merging the three regulatory bodies into one that the Minister has produced for the Committee are extremely wide rangingI do not have them with me, although we touched on them in Committee and I am sure that he would admit that. The Minister was asked in Committee whether he could identify how much in those figures represented economy of scale savings from bringing three bodies into one and how much represented contributions from fees earned. At that point, however, the Minister could not clarify what percentage would be contributed by the scale of the fees that he is proposing in this Ways and Means resolution.

Stephen O'Brien: In fairness to him, the Minister offered to send a letter setting out some of the financial parameters. I want to ensure that my hon. Friend thinks that he covered that and that it is adequate for the purposes of passing the resolution that we should not have received those details until after we have challenged the Government on whether it is the appropriate way forward.

Angela Browning: My hon. Friend is exactly right. Notwithstanding the promise that the Minister made in Committee to give more clarification on the figures, it is difficult to make head or tail of them if we cannot disaggregate the fee contribution in the calculations that the Minister has offered. When he replies to my contribution, will he be so good as to elaborate on exactly how the fee-bearing side of the regulations will contribute to the broader figures in the regulatory impact assessment?

Ben Bradshaw: I am sure that the hon. Member for Tiverton and Honiton (Angela Browning) will know that the fees to which she referred are connected to the establishment of the new care quality commission. That is outwith the remit of this resolution, which deals with the independent adjudication of the medical professions. As the hon. Member for Eddisbury (Mr. O'Brien) reminded her, I promised to write to members of the Committee with more details of those costs, and I shall do so, but they are nothing to do with the resolution that we are debating today.
	Given the amount of time that we have spent discussing this matter, I do not intend to detain the House further by responding to the many and, I have to say, mainly extraneous and inaccurate points made by the hon. Member for Eddisbury. I shall simply point out to him that we cannot debate them under new clause 7 in Committee until this resolution has been authorised.

Question put:
	 The House divided: Ayes 307, Noes 229.

Question accordingly agreed to.

National Lottery

James Purnell: I beg to move,
	That the draft Payments into the Olympic Lottery Distribution Fund etc. Order 2007, which was laid before this House on 25th October, in the last Session of Parliament, be approved.
	I recently met two young Olympic hopefuls. One was an incredibly impressive young woman who gets up every morning and does two hours of swimming before school and two hours after school in pursuit of her dream of competing at the London Olympic games in 2012. The second is a young disabled athlete who is hoping to compete at table tennis, and whose father told me that even before there was the possibility of his son's going to the Olympics, the very fact of training transformed his confidence to such an extent that he now goes on training weekends without his carersomething he would never have done before. Those are just two young people, but our Olympics will be an inspiration to a whole generation. It will be one of those events where hyperbole is justified. It will be a once-in-a-lifetime experience. It will bring the country together. It can transform Britain's reputation overseas.
	The Olympics can be all those things, but we have set ourselves a bigger goal: we want it to be the best Olympics ever. My right hon. Friend the Minister for the Olympics has put in place the best preparations ever seen for an Olympics at this stage; those are not my words, but those of Jacques Rogge, president of the International Olympic Committee. There are three building blocks to those preparations. First is a clear organisation with the right structure and world-class leadershipwe have that. Secondly, like any team, our success will depend on our cohesiveness and supportand with 76 per cent. of the population backing the 2012 games, rising to 90 per cent. among young adults, we have that, too. The third element is a robust funding package, and that is exactly what we have. Last March, my right hon. Friend announced a 9.325 billion public sector funding package for the games, including contingency funding to manage risks. Of that total, 6.09 billion was identified for Olympic Delivery Authority costs. The remaining contingency funding will be released only if needed.
	Cross-party consensus is undoubtedly important to speed our progress towards the best ever Olympics, but there is also, of course, a legitimate space for scrutiny and challenge. That is why my right hon. Friend provided Parliament with details of the ODA baseline budget in December, as soon as it was confirmed, and why she has agreed to provide every six months a full update of progress of the Olympic spend against the budget and the breakdown provided in December. The motion puts in place an important part of the funding package. It allows for 1.085 billion from the national lottery distribution fund to be transferred to the Olympic lottery distribution fund.

Anne Snelgrove: That is a diversion of funds from the national lottery to the Olympics, and while the Olympics is an important part of our culture and will be very important in the run-up to 2012, will the Secretary of State guarantee that there will be no more diversion of funds away from good causes after this announcement?

James Purnell: My hon. Friend makes an important point, which has also been made by a number of stakeholders, including the National Council for Voluntary Organisations, Heritage Link and the Voluntary Arts Network, which I met over the past week, and the National Campaign for the Arts as well. I hope that my hon. Friend will be happy to hear that I can confirm today that there will be no further diversion from lottery good causes to fund the Olympics.

Frank Field: I intervene on the Secretary of State merely to strengthen his hand. Should events not turn out as he plans, might he remind those who come back with a begging bowl that while his Department ensured that the Olympics has in excess of 9 billion, it found only 5 million for Liverpool as city of culture?

James Purnell: Actually, that is not correct: we found 11.2 million, I think, which is more than we were required to find by the bid for the capital of culture, which asked for 10 million. In addition, there has been a significant contributionI think more than 25 millionfrom the Heritage Lottery Fund towards galleries and projects in Liverpool, and a significant contribution from European moneys as well. I was there on Saturday for the opening night, and I know that the Liverpool capital of culture will be a fantastic success and that people are looking forward to it across the country.

Adam Price: rose

James Purnell: I am sure they are looking forward to it in Wales as well.

Adam Price: Liverpool is, of course, the unofficial capital of north Wales.
	How can the Secretary of State justify the further diversion of lottery funds before the House this afternoon? How can it be right that the poorest communities in the UK have to finance the regeneration of London?

James Purnell: I am glad the that hon. Gentleman thinks that Liverpool is the unofficial capital of north Walesthe nationalist influence of being in coalition with the Labour party in Wales is obviously starting to rub off, even now. If he waits for the rest of my speech, he will hear a clear argument on the point he has made.

John Grogan: Given this diversion of resourcesI say this as a strong supporter of the Olympicsis there not a case for changing the taxation system of the lottery to a gross profits tax, following the example of most of the gambling industry, which some estimates suggest could mean up to 400 million for good causes over the next decade?  [Interruption.]

James Purnell: The hon. Member for Bath (Mr. Foster), who has also raised this complex issuehe did so at the previous oral questionsmakes a loud cheer from a sedentary position. I thank my hon. Friend for his support for the Olympics and for raising that question. I am happy to announce that my Department and the Treasury will re-examine the issue. The House will understand that tax policy is a matter for the Chancellor and would be covered in the Budget, but I hope that I have given my hon. Friend the assurance that he was after.

Adam Price: rose

James Purnell: I shall make some progress and then answer the hon. Gentleman's question when I come to that point in my speech.

Hugo Swire: Will the Secretary of State clarify what he has just said? Has he said that as well as trying to announce another raid on the lottery this afternoon, his Treasury colleagues will examine the question of taxation in respect of the national lottery?

James Purnell: The hon. Gentleman raises the point of the tax regime for the lottery. Some people, including Camelot, have argued that moving to a gross profits tax regime could mean further money for good causes. The issue is complex, but we are announcing today that we and the Treasury will examine it again. I hope that that assurance will be welcomed by the House.
	As I was saying, the order puts in place the funding package from the lottery. It allows for 1.085 billion to be transferred in 15 instalments, starting on or after 1 February 2009 and ending on or after 1 August 2012.

Kate Hoey: The explanatory memorandum helpfully gives details of the net effect of the order on each distributorit will be about 99 million on Sport England, some 4 million on Sport Northern Ireland and so on. Will the Secretary of State tell me whether his Department has done an analysis in conjunction with those bodies of exactly what the order will mean in terms of cuts at grass roots level and money that those many community groups might have expected over the next few years?

James Purnell: I shall come to that matter later in my speech. An impact assessment has been published to accompany the order. It is obviously slightly counterfactual, because one does not know what grants would have otherwise been made. I shall make some announcements later in my speech that I hope will reassure my hon. Friend.
	I shall try to finish the paragraph of my speech that I am currently in, as I have been on it for a while. The 1.085 billion is made up of 410 million, as previously confirmed, and an additional 675 million as announced in March 2007. We have been open about the fact that that will mean that there is less money for the lottery between 2009 and 2012, and of course we recognise that concerns have been expressed about that. I am keen to respond to them as strongly as I can.
	When my right hon. Friend the Minister for the Olympics announced this funding package, she agreed with the Mayor of London that lottery distributors would be repaid the additional 675 million from the profits arising from the sale of land in the Olympic park after the games. Hon. Members will have seen stories in the press this morning reporting pessimistic forecasts for growth in land values. The headline in this morning's story is highly misleading, because the Olympic budget does not rely on land salesthere is no black hole in the Olympic budget. What has been saidthe Mayor said this as early as April last yearis that we have to make estimates about the increase in land values. The prudent basis on which the London Development Agency has always made its assumptions is that values would grow at the rate of 6 per cent. But the Mayor also said in April that, given past trends in growth, it was possible to estimate much higher growth, up to 19 or 20 per cent. We are therefore confident that we would be able to repay the lottery if those levels of growth were achieved, but that does not create a black hole in the funding and there is nothing new about the story in the papers today. Those figures have been in the public domain for some time.

Mark Field: The Secretary of State suggests that the Olympic budget somehow remains intact, but the public at large see an overall package for the cost of the Olympics. It is not simply a matter of the budgetary figures; there is also the notion of repaying the lottery in the way that he has described. If land values fail to go up, the lottery will not be fully reimbursed. Therefore, our concern is that the financial package is incomplete. The budget may be intact, but that is not to say that the lottery will not be raided.

James Purnell: We have the same goal, which is to repay the lottery from the increase in land values. The amount is in line with growth over the past 20 years and it is not an optimistic forecast. It will also be realised over the next 10 to 20 years, and regardless of market conditions at present, it is right to have confidence that we will be able to deliver on the memorandum of understanding between my right hon. Friend and the Mayor.

Paul Farrelly: I share the concern about the additional raid on the national lottery money, but I recognise that the Government have moved to repay the proceeds in this way. It would be more comfort, in terms of incentives in the future, if my right hon. Friend looked more carefully at who will handle those land sales and whether it should be the London Development Agency or an independent body.

James Purnell: That is a matter for the Mayor and the LDA. We have a high level of confidence in the LDA's ability, and it has been a key partner in delivering the Olympics. I welcome my hon. Friend's support for the proposal.
	The second commitment that we have made, in listening to people's concerns, is to look carefully at grant in aid funding and to secure increases in the current spending review for the good causes that will be affected. The Arts Council will receive an extra 50 million, an increase of 3.3 per cent. above inflation over three years. Sport England will receive an increase of 2.1 per cent. above inflationan increase since 1997 of more than 170 per cent. English Heritage will receive an increase of 7 million in cash terms by 2010-11, which was welcomed as good news by Sandy Bruce-Lockhart, its chairman.
	The third commitment that we have is to protect voluntary groups. We have agreed with the Big Lottery Fund that, first, no existing projects will be affected, and secondly and importantly, that we will honour the Big Lottery Fund's commitment that at least 2 billion will be available for the voluntary and community sector over the next five years. I understand from the papers that the Conservatives

Greg Clark: The Secretary of State has made a commitment on the Big Lottery Fund. Does that commitment extend to the distribution to voluntary groups by the other lottery distributors?

James Purnell: The other lottery distributors will operate at arm's length and make their decisions. They do fund voluntary organisations, and indeed a large part of their money goes to such organisations. I am glad that the hon. Gentleman intervened, because I understand that the Conservative party is considering not supporting the order and instead taking the money from the Big Lottery Fund and the so-called pet projects. I hope that the Conservatives will not do that, because there are no pet projects. Lottery policy has moved on since the New Opportunities Fund, which has been abolished, and everything is delivered through the Big Lottery Fund.
	If the proposal were to take all of the 675 million from the BLF, it would involve a significant raid on the voluntary sector. Existing projects would be cancelled and the full 2 billion guaranteed to the voluntary and community sector could not be delivered. It could also mean some 250 million of cuts to that sector. I trust that the Conservative party will not make that proposal later in this debate.

Robert Key: While the Secretary of State is talking about existing commitments being cancelled, can I remind him of the Stonehenge fiasco? The heritage sector has lost hundreds of millions of pounds in value through the Government's decision to cancel the projectincluding the cancellation of the visitor centre. Not one penny has been promised to provide a new visitor centre or to substitute for the grand plan that has now been shattered by the Government. The heritage sector always seems to lose out whereas the Olympic sector gets bigger and bigger. I hope that he will not forget that when he cites the recognition by Lord Bruce-Lockhart that the 7 million or whatever is welcome. It is not doing the cultural heritage of our country any good to see money leaking away from the lottery all the time.

Mr. Deputy Speaker: Order. May I remind the House that short interventions are good at all times, but especially when we are in a time-limited debate?

James Purnell: The hon. Gentleman has been a resolute campaigner for Stonehenge, and he makes his point clearly and forcefully, as always. He might want to talk to his own Front-Bench spokesmen. The hon. Member for Tunbridge Wells (Greg Clark) has promised that at least as much funding will go to charities, while the shadow spokesmen for the Department for Culture, Media and Sport have promised to go back to the old good causes. That all adds up to more than 100 per cent. of the lottery. The Conservatives say different things to different audiences and have ended up double-counting the funding.

Greg Clark: The Secretary of State seems to be unaware that among the other good causes, including heritage organisations, there are many charities and voluntary organisations. Is he not aware of that aspect of his brief?

James Purnell: So is the hon. Gentleman saying that the Conservative party would not stick to the 2 billion guarantee? Is that his commitment? I know that he and the hon. Member for South-West Surrey (Mr. Hunt) like to write policy pamphlets together; perhaps they would like to focus on policy next time, before they start to widen their approach.
	A concern was also expressed that the Government would continue to collect funding from the planned Olympic lottery game after the target of 750 million is reached. I can confirm that that is not the case.
	In our last discussion on the subject, the hon. Member for Bath highlighted an issue about grey lotteries, which are opportunities to bet on the numbers or outcomes of overseas lotteries. I shall ask the Gambling Commission and the National Lottery Commission to explore the cases that give rise to concern. I know that the hon. Gentleman has such concerns, and he is welcome to make them known to both organisations.
	I believe that the commitments that I have made today should form the basis of cross-party consensus. I hope that that is what will be delivered. Both main Opposition parties supported the Olympic bid and the subsequent Bill. I trust that that will continue to be the case. One of the lottery's founding purposes was to support such big national projects, as the Conservative Government did with the Millennium Commission, which funded a similar event. Both Opposition parties supported the approach to the Olympics, and I hope that that will continue.

Michael Fabricant: rose

Mark Field: Will the Secretary of State give way?

James Purnell: No, I know that time is limited and I want to wind up.
	In the original funding package, the lottery made up 44 per cent of the total. The new funding package provides an extra 5 billion from the Exchequer. The lottery will contribute an extra 675 million, and its share of the total will therefore fall to 23 per cent.
	I can also finally report that the National Lottery Commission has informed me that under the third licence recently awarded to Camelot, which will run from 2009, returns to good causes are likely to increase by between 600 million and 1 billion over the 10-year period of the licence, based on constant levels of sales at 5 billion per annum. I am depositing in the Libraries of both Houses today a letter from the chair of the commission to set that out.
	The order is intended to secure the best Olympics ever for this country and to inspire a generation of young people to aim to be the best they can be. Our task is to deliver the political consensus to make that a reality.

Jeremy Hunt: Perhaps the best example of the Olympic spirit was shown by someone who never competed in the Olympics, although his sport is recognised by the International Olympic Committee: Sir Edmund Hillary, who died last week. He did one of the most competitive things ever by being the first man to set foot on the highest peak in the world, but he combined it with remarkable modestyso much so that, apparently, when he reached the peak he took photographs of Sherpa Tenzing, but forgot to ask Sherpa Tenzing to take photographs of him. For most of his life, in the spirit of not wanting to be one up, he refused to confirm which of them had reached the peak first. That combination of competitiveness and decencythe desire to win, but to do so with honouris what we want 2012 to bring to London.
	It is therefore right that we approach the Olympics in a spirit of bipartisanship, with as much cross-party support as possible. In that spirit, we on the Conservative Benches are happy to pay tribute to the Government's achievement in winning the 2012 bid. It was a personal victory for Tony Blair and Lord Coe. The Opposition's redoubtable shadow Sports Minister was in Singapore at the time and, although he does not claim to have swung the bid, his presence was important, as it demonstrated cross-party support. When he was Leader of the Opposition, my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) spoke to the International Olympic Committee to confirm our support for the Olympics and, as the Secretary of State said, we supported the London Olympic Games and Paralympic Games Bill at every stage.

Edward Leigh: How was it in the Olympic spiritor even decentfor the Government to pull the wool over the public's eyes? The games will cost more than twice as much as was promised when the bid was made. How is that decent?

Jeremy Hunt: My hon. Friend makes an important point. I was about to say that the spirit of cross-party support has been sorely tested at regular intervals, mainly over budgetary issues.
	The budget was raised last March. It was not raised by 20 or 50 per cent., or even doubled: instead, it was nearly tripled, to 9.3 billion. Did the Opposition withdraw our support for the Olympics, or say that it was a mistake to spend the extra money or to have bid for the games in the first place? No, we did none of that. Our support for the Olympics has been rock solidrather more so than the Secretary of State's. When the bid was being assembled, he was leading the charge against it, so we will take no lessons from him about the need for an Olympics consensus.
	However, the Secretary of State will appreciate that our commitment to the success of 2012 means that we have a duty to speak up when we think that the Government are managing the project badly. We have a responsibility to scrutinise the use of taxpayer's money, to protect the good causes for which the lottery was set up and to ensure that the games are on a sound financial footing.
	In the spirit of bipartisanship, I spoke to the Secretary of State in the Lobby last week, and I also wrote to him last Thursday. I said that the Opposition would be prepared not to vote against the statutory instrumenteven though it is in large measure due to the Government's financial incompetenceif the Government could reassure us on two matters.
	The first reassurance that we seek is that the Government will publish proper cash flow figures for the project. Those figures should set out the money that has been spent and contain cash flow forecasts. The Secretary of State will know that, if accounts are to be scrutinised properly, they must contain a profit and loss balance sheet and a cash flow analysis. With a project of this size, however, we can determine whether it is under proper financial control only if we are able to measure the rate at which cash is going out of the door and to compare that with the rate that was predicted. That is why the cash flow forecasts and outcomes are so important.
	In response to my request, the Secretary of State said that he was prepared to make available any figures that the Department had, but that he did not want to construct figures especially for us because that would involve a cost. He said nothing in his speech about cash flow forecasts for the way in which the Olympic budget will be spent, so are we to take it that no such forecasts have been prepared? If they do exist, will he publish them so that we can scrutinise the progress being made and the rate at which money is being spent?

James Purnell: I can tell the hon. Gentleman that that information is available, and that my right hon. Friend the Minister for the Olympics will be happy to have quarterly meetings with both Opposition parties to go through it. The information will be subject to commercial confidentiality, but it will be available for scrutiny.

Jeremy Hunt: I am very grateful for that concession, as it will greatly improve our ability to scrutinise the progress of the Olympics budget. Most importantly, it will mean that there will be no repeat of what happened last March, when the budget had to be tripled.
	We sought one other concession, however. It was, as the Secretary of State says, a commitment that there would be no more raids on good causes. Why should good causes, which the lottery was set up to protect, suffer from Government financial miscalculations? We have to recognise that the good causes have suffered a triple whammy as a result of the Olympics. There was the original 410 million; then the 750 million from the special Olympics lottery games, which, it now transpires, will cannibalise much of the revenue that would have been raised through the normal lottery games that raise money for the good causes; and then the additional 675 million.

Michael Fabricant: My hon. Friend is quite right in what he has just said. He is also right to say that none of us should be demonised if we question the amounts of money being spent on the Olympic games particularly those of us who are not from metropolitan London and who will not feel quite the same benefit as Londoners from the legacy. There are already swingeing cuts in the arts. Lichfield Garrick theatre is no longer to receive its funding, nor is the Birmingham repertory theatre, and that situation is replicated throughout the United Kingdom. What assurance do we have that the situation will not get worse?

Jeremy Hunt: My hon. Friend makes an extremely important pointhe is absolutely right. I shall talk later about the impact in the rest of the country and on arts budgets.

Michael Weir: Earlier, the hon. Gentleman rightly mentioned that the cost of the Olympics has already tripled. He accepts the Secretary of State's assurance that there will be no more raids on the lottery, but what happens if the cost continues to climb? Where will the money come from? At what point will the Conservative party say, Enough is enough?

Jeremy Hunt: We are saying, Enough is enough, which is why we said that if there are further problems with the Olympics budget we do not want any more raids on the good causes. That was the purpose of extracting the concession that we extracted.

Anne Snelgrove: Will the hon. Gentleman give way?

Jeremy Hunt: May I make a little more progress before giving way to the hon. Lady?
	What the Secretary of State said about the headline in  The Times today was inaccurate. He said that there is no new information, but of course there is very serious new information. The article states that
	Land agents contacted by  The Times
	say that the sale of land is unlikely to make the amounts predicted because of
	the current flattening of the housing market.
	The ability to meet the commitment to help lottery good causes from land sales has changed materially because of the change in housing price conditions.

James Purnell: What I am saying is that there is nothing new about the Government information and the Mayor's information that has been provided. We cannot control everything that estate agents say. However, as early as April last year, the Mayor said:
	In the last 20 years land prices in London on average have increased 19 per cent. a year. Take the last 10 years, where we have had a more consistent margin, it's averaged 20 per cent. and the lowest increase in any one year was 6 per cent.
	Those figures have been in the public domain for a long time.

Jeremy Hunt: They have been in the public domain for quite some time. The Mayor said that a month after the budget tripled and he was trying to reassure good causes that, according to that scenario, they might make up 1.8 billion. Looking at the state of the market now, we realise that the amount raised is likely to be 1 billion less than that, which is another whammy for good causes.

Anne Snelgrove: Will the hon. Gentleman give way?

Diane Abbott: Will the hon. Gentleman give way?

Jeremy Hunt: I would like to make a little more progress; I will give way later.
	We fought hard for the concession that the Secretary of State has madethe commitment not to take any more money from good causes. That is a victory for our fight and it is a victory for the hundreds of thousands of people who work for charities and voluntary organisations, arts and heritage groups and sports clubs up and down the country, because their big concern was that, given the Government's appalling record of financial incompetence on the Olympics budget, they would be stung not only today, but many times in the future.
	The Secretary of State talked about bipartisanship, but if he intended to make that pledge today, why did he not tell me that when we met at 9 o'clock last night? He asked to meet me then to discuss today's debate. If we are to maintain cross-party supportassuming that he did not make that decision after our meeting last nighthe might at least have had the courtesy to tell me then. I suggest that that would be a better way to create a spirit of cross-party support than playing party political games.

James Purnell: I am happy to proceed on the basis of cross-party consensus. I am sorry for the tone that the hon. Gentleman's speech has taken. It is the Government's intention to continue on that basis. If he does not want to do the same, that is entirely up to him.

Jeremy Hunt: With respect, that is exactly what I want to do. I am just saying that if the Secretary of State was going to make a concession as major as the one that he has just made, why did he not tell me at our meeting at 9 o'clock last night?
	The Secretary of State mentioned an additional 600 million to 1 billion in lottery income under the new Camelot licence. Those numbers are based on items in the Camelot bid document. He will know that they are very speculative. They depend on the Treasury's agreeing to move to a gross profits tax, which he said has not been confirmedhe is simply prepared to consider it again. They depend on the introduction of restrictions on lottery-style games in adult gaming centres. Again, he said that he would ask the Gambling Commission and the National Lottery Commission to consider it, but there is no undertaking that it will happen. They also depend on the approval of the National Lottery Commission. We have a commitment from the Secretary of State to examine ways to increase the returns to good causes, versus what is written in black and white in the statutory instrument, which is that there is to be a raid of 90 million on the arts and heritage budget and of 70 million on the grass-roots sports budget.

Don Foster: I wonder whether the hon. Gentleman could help me and the House by confirming what he has just said. He said that the figure given by the Secretary of Statethe 600 million to 1 billion in increased money that Camelot would effectively give to good causes over 10 yearswas predicated on the introduction of GPT, the closing down of the grey areas of lotteries and so on. I had a discussion this afternoon with Camelot, and what it told me was rather different. It assured me that the figure depended entirely on the new agreement about how it will operate. None of the three factors that he mentioned was referred to at all. Will he help me on that point?

Jeremy Hunt: I am delighted to do so. We must have been speaking to different people at Camelot; my office had a discussion with Camelot this afternoon, in which it told us that the additional increase in money to good causes was clearly predicated on those three things.
	The concessions are important, but they do not undo the main damage caused by the order. It is extraordinary to fund a 9.3 billion Olympics budget by cutting the budgets for grass-roots sportsthe very budgets that could provide the sporting legacy that was the big promise of 2012. Derek Mapp, who resigned as chairman of Sport England, described it as a cut too far. He is, or was, a strong Labour supporter. In 2004, he gave 3,000 to his constituency Labour party, because he presumed that widening participation in sport was a central plank of the Government's 2012 strategy. Like us, he has no doubt read the London plan, part of the London 2012 candidate file, which said that the games would succeed in
	leaving a legacy to be valued by future generations.
	In fairness, the Secretary of State used to take a rather different view, saying:
	The Olympics would inevitably deprive other schools of new pitches and extra coaches. Why? Because we won't be able to raise the extra lottery money, and because the costs will overrun.
	It seems that he knew better what his own Government would do than either Derek Mapp or we didthe sad truth is that his predictions have turned out to be spot on.

James Purnell: I am afraid that that was said before a 170 per cent. increase in the Sport England budget, a sevenfold increase in the contributions of the Department for Children, Schools and Families and the Department for Culture, Media and Sport, a five-hour offer for children doing sport in schools and a huge increase in the number of playing fields as a result of the building schools for the future programme, which will refurbish or rebuild schools during the next few years. Grass-roots sport is thriving thanks to our investment. By contrast, the Conservatives did not invest in it at all.

Jeremy Hunt: I suggest that the Secretary of State do the math, as they say in the United States. If one adds up the amount put into grass-roots sport this year from both Government spending and the lottery, it comes to 135 million less than in 1997. Grass-roots sport has suffered, and it will suffer even more. The impact of the cuts in additional spending made this afternoon alone70 millionis 108,000 per constituency, which is equivalent to one floodlit multi-use games area or 100 m grass pitch in the constituency of every single Member of this House.

James Purnell: Let me save the hon. Gentleman from having to correct the record himself. The combined grant in aid and lottery funding has gone up from 174.9 million to 465 million in 2006-07, which I think is the figure that he quoted. From 174 million to 465 million is more than a doubling of the amount of money.

Jeremy Hunt: I am happy to trade statistics with the Secretary of State any time, and I am happy to confirm the figures with him. Funding has gone down not just for grass-roots sport, but even more for arts and heritage.

Hugo Swire: My hon. Friend will well remember when the former Minister for Sport, the right hon. Member for Sheffield, Central (Mr. Caborn), came back from Sydney and said, quoting someone he had met out there:
	'Do not underestimate the budget. If you have to go higher, it will be seen as a failure so make sure your calculations are realistic.'[ Official Report, 21 July 2005; Vol. 436, c. 1505.]
	From this afternoon's announcements, what on earth makes anyone in the Chamber, other than those on the Labour Front Bench and possibly some Back Benchers, believe that the new figures are realistic? How can we sell them to our constituents, who are suffering from the cuts in grass-roots sports and in our local theatresthe Northcott theatre in Exeter and others throughout the country? Why are the new figures any more realistic? What is to prevent the Minister from asking for more money again in a few months? Surely it is the duty of every Member of the House to protect those causes, which are already suffering so badly.

Jeremy Hunt: I am grateful to my hon. Friend for his comments, which are extremely well put.
	If the Secretary of State does not want to listen to figures from us, why does he not talk to people in the industry? Tim Lamb, the former chief executive of the England and Wales Cricket Board, who now runs the Central Council of Physical Recreation, said:
	What's the use of getting more kids involved in sport at school if they don't have decent facilities to play with when they leave? The Lottery must not be used as a piggy bank for ministers to pay for the games.
	If the choice is made between funding lottery good causes or funding the Olympics, we will fail in our commitment to the Olympic legacy, because it is the lottery commitment to grass-roots sport that is the means whereby we will provide that legacy.
	Why have all these problems arisen? The construction budget went up by 29 per cent. last March; the regeneration budget went up by 70 per cent.; and the security budget nearly tripled to nearly 600 million, despite the fact that the original security budget at 220 million was less than the Greeks paid for the Athens Olympics. Why we thought it would be cheaper to make the London Olympics secure, I do not know.
	There were two items in the revised budget that, inexplicably, did not appear in the original budget. The revision included a contingency budget of 2.7 billion. We now know that it was against explicit Treasury guidelines not to have a contingency budget in a project of that size, yet the Treasury approved the original budget. There was a VAT bill of 840 million in the new budget. If the Treasury approved the original budget, why did it decide that it did not need VAT then, but that it needed nearly 1 billion of VAT the second time? Since then, the news has got worse, not better. In June we heard that the security budget may go up to 1 billion. In October the Olympic Delivery Authority said that the cost of the stadium would go up 77 per cent.by another 216 million.
	Let us return to the lottery. In order to secure the bid, the bid team made great play of London's cultural heritagethey talked about the 300 museums and galleries and the five symphony orchestrasbut because of today's measure, arts and heritage distributors will lose 90 million each. The Secretary of State spoke about English Heritage. Dr. Simon Thurley, the chief executive of English Heritage, stated:
	Inevitably the additional reduction in Lottery funding will reduce opportunities for the cost of inspirational projects which have transformed the historic environment...and made it accessible to millions more people.
	Peter Hewitt, chief executive of the Arts Council of England until the end of this month, said:
	The reduction in budget . . . will hit smaller arts organisations at grassroots level very hard.
	The Olympics will be in London, but of course we want it to benefit the whole country, so it is particularly depressing to read the remarks of the chief executives of the Arts Councils of Wales and Scotland. Peter Tyndall of the Arts Council of Wales commented:
	Many projects will be unable to go ahead and individual artists will not have their work funded.
	Jim Tough, the acting chief executive of the Scottish Arts Council, said:
	The Scottish Arts Council is disappointed by this decision . . . the plans will undoubtedly also have a serious impact on general participatory activity and programmes for future years.

Pete Wishart: It is worse than that for us in Scotland. We are holding the Commonwealth games in 2014, but SportScotland has said that it will be deprived of 13 million of spending. How on earth are we supposed to pay for the Commonwealth games when we are deprived of that kind of money?

Jeremy Hunt: The hon. Gentleman makes a reasonable point.
	In conclusion,
	We don't believe it would be right to use Lottery money to pay for things which are the Government's responsibilities.
	Those words are not ours, but those of Tony Blair in 1997; as ever, unfortunately, his actions did not live up to his rhetoric. We urge the Government to examine whether it is possible to fund the shortfall, not by the cuts outlined in this measure, but by using the funds that the Big Lottery Fund would have spent on projects that should be funded by central Government Departments.

Mark Field: Will my hon. Friend give way?

Anne Snelgrove: Will the hon. Gentleman give way?

Jeremy Hunt: I shall make progress if I may; I am just drawing to a close.

Anne Snelgrove: He promised.

Jeremy Hunt: I did promise, so I will give way to the hon. Lady.

Anne Snelgrove: Will the hon. Gentleman acknowledge that Members from across the House have grave concerns about good causes? That is why I asked the Minister my question. In the spirit of moving forward together, will the hon. Gentleman acknowledge that it would be an excellent idea for us all, including Members of his party, to recognise the importance of the Olympics as well as that of the good causes? I hope that he and his party will vote for the motion.

Jeremy Hunt: It is because we recognise the importance of the Olympics and good causes that we are trying to find a better way than that proposed by the Government this afternoon.

Mark Field: rose

Jeremy Hunt: I give way to my hon. Friend, but his will be the final intervention.

Mark Field: I thank my hon. Friend. Anyone who has listened to this debate for the past 20 minutes will have been impressed by my hon. Friend's grasp of the statistics. Does he recognise that our biggest complaint in the past few years has been that the creation of the Big Lottery Fund has made lottery funding that much more opaque? That is one of the reasons why statistics have been bandied around in this debate. We need a clear reassertion of the four main heads of good causes. When the lottery came into being, there was the millennium fund. Does my hon. Friend agree that it is a great shame that we did not simply transfer the money from that fund into the Olympic fund?

Jeremy Hunt: As ever, my hon. Friend has made an excellent point. I think that he is really saying that if the lottery were returned to its original four good causes we would not have a lot of the pain that we are suffering today. The structure that the Government have set up for the lottery gives the Minister the power to determine 50 per cent. of the money from lottery good causes. That has led to a lot of the problems.
	Some 9.3 billion would be a huge amount if it were simply for 17 days of entertainment. However, if the Olympics can be a catalyst in transforming attitudes to sport, harness the power of grass-roots sport so that men and boys join grass-roots sports clubs rather than gangs, engender a sense of national pride and Britishness, and showcase our sport, which comes from the country responsible for more international sports than any other, perhaps that enormous sum will be more acceptable to hard-working taxpayers.
	However, that sum will not be acceptable if the Government are not transparent about the budget, if they make charities and voluntary organisations pay the price for their financial incompetence, or if they decimate grass-roots sports clubsthe very organisations that can secure an Olympic sporting legacy. This afternoon, the Government will win the vote, but I hope yet that we will win the argument.

Don Foster: It has not been a good Olympic day for me; unfortunately, the British Olympic Association decided that Aldershot should be a major training base for the British team in the run-up to the 2012 games. That base will not now be at Loughborough university or the excellent facilities at Bath university in my constituency.

Andy Reed: rose

Don Foster: I happily give way to the hon. Gentleman.

Andy Reed: I am grateful. As the hon. Gentleman knows, if Aldershot had not been chosen, Loughborough would have been. However, he has mentioned an important aspect. Those of us in the regions will benefit from the Olympics in whatever waynot necessarily from the 9.3 billion, but through such things as training camps, holding camps and the build-up. Those will benefit places such as Loughborough and Bath, regardless of the British Olympic Association's decision to go to Aldershot.

Don Foster: The hon. Gentleman makes an excellent point. I continue to be a keen supporter of the Olympics because I believe that all parts of the United Kingdom will benefit in a variety of ways.
	However, this debate is about the lottery. I am delighted to follow the hon. Member for South-West Surrey (Mr. Hunt), who said that it was vital for the Government to keep their sticky little hands out of decisions about the lottery. I entirely agree. It is a pity, therefore, that in 2001 the Tories proposed extra lottery money for local authority-controlled museums and art galleries and, in the same year, 5 million more to protect British heritage overseas. In 2005, they proposed more lottery money for village halls and parish churches and, in their last manifesto, 750 million for their proposed club and school sports programme. Even their leader has been at it: in an interview in 2006, he suggested using the national lottery to fund his proposed national school leavers programme. They say one thing, but act rather differently.
	Liberal Democrats have always believed that it is vital to maintain the independence of lottery funding from Government, but we have always accepted that there will be exceptions to the rule. Four years ago, when the Government proposed that some money be taken from national lottery good causes to fund part of the Olympics, we, along with all the other major political parties, reluctantly agreed to it, because we believed that the benefits that would accrue in terms of sport, culture, heritage, regeneration and tourism far outweighed the disbenefit of the cuts to the good causes.
	We assumed that that would be the only time we would be asked to do that, but things have not worked out quite as we expected. Part of the package was the 750 million to be raised by new Olympics-related lottery gains. Of that money, more than half59 per cent.was to come not as new money from ticket sales but from cannibalisation, as it were, as people switched from the games that supported the traditional good causes. That would have meant a loss of about 450 million to the lottery good causesbut as the recent report by the National Audit Office pointed out, the cannibalisation rate is much higher, at 77 per cent. That means that even the first agreement to cut money from the lottery good causes has involved an additional, unexpected cut of some 135 million.
	I am not surprised that that figure has changed. I do not know if any other hon. Members have visited their local lottery distributors recently, but it is impossible to tell from the scratchcards whether they are supporting the Olympics or the traditional good causes. Only in very small print on the back of the cards, not visible to the people who buy them, does it say whether the money is going to the Olympics or to the other good causes. In the outlets that I have visited, a significantly higher proportion of cards were supporting the Olympics than the other good causes. I hope that the Secretary of State will see whether it is possibleI understand that there are difficulties to do with the International Olympic Committeeto make it clearer to those purchasing scratchcards which of the good causes, the Olympics or others, they are supporting.
	That cannibalisation will get even worse if we allow the money raised to go beyond 750 million, and we have asked the Secretary of State for an assurance that that figure is an absolute cap.

Adam Price: The hon. Gentleman has eloquently demonstrated why the so-called major parties, as he dubs them, were naive to believe the Government the first time round. Why should anyone believe them this time?

Don Foster: The honest truth is that we have to take people at their word and look at as much evidence as possible. I congratulate the hon. Member for South-West Surrey on gaining from the Government the concession whereby more detailed analysis of the figures will be made available for us to study. That is very important. We now have on record an assurance, which we did not have last time, that there will not be any further raid on the lottery good causes to fund the Olympics. Although I said earlier that we expected that to be the case, it had never been put on the record. It has been put on the record today, and I welcome that.

Michael Weir: I pose to the hon. Gentleman the question that I posed to the Conservative Front-Bench spokesman. Given that the cost has already trebled, what happens if the Government come back and say that they need more money as we get close to 2012? Where will that money come from? Will he refuse any more money when we get to the wire?

Don Foster: In my contribution, which I hope to continue for a brief period, I shall make some proposals as to how we find additional money. I will be particularly interested to hear the contributions from the SNP and the Welsh nationalists in which they explain their position. They can bleat, but it seems to me that there are two choices. People can either sit there and just whinge, and say, We can't do anything about it, or they can make constructive positive proposals. That is what I seek to do.
	We know that there have been problems with the budget. We were originally told that it would be 2.375 billion. In 2006 that figure rose to 3.3 billion, and in early 2007 it rose to 5.1 billion. We are now looking at a figure of 9.3 billion. Before the Minister for the Olympics jumps to her feet, I know that putting it like that is not fair because I have not compared like with like; nevertheless, she will accept that the figures have increased substantially. That is why we are being asked whether we are prepared to authorise a further take from lottery good causes to fill that black hole in the budget.
	We want the Olympic games and the Paralympics to succeed, which also means ensuring that they deliver a legacy. As we heard from the hon. Member for South-West Surrey, many people believe that a further cut will damage the very bodies that will deliver that legacy. Dame Liz Forgan, chairman of the Heritage Lottery Fund, says that
	this further cut will impact on our ability to invest in the nation's heritage at exactly the time it is being showcased to the world.
	Robin Simpson, chief executive of the Voluntary Arts Network, warned:
	The further diversion of lottery funds threatens to erode this support and...the development and survival of many groups.
	As we have already heard, the Central Council for Physical Recreation has expressed real concerns that the
	diversion of funding is likely to result in reduced participation.
	There is a problem for those of us making a decision today. Do we simply say, No, we're not allowing that to go ahead because of all of the potential problems, or do we come up with constructive proposals to find ways of getting additional money to the lottery good causes that will make up for the cut, to help them to deliver that legacy? That is why we have been in discussion with the Secretary of State, as has the hon. Member for South-West Surrey, and we recognise that others have as well. CCPR has put forward its suggestions in discussions with the Government, including the enhancement of the excellent community amateur sports club scheme through the application of gift aid to junior club subscriptions and the reduction of licensing fees. It has also proposed the use of some of the proceeds from dormant bank accounts to help in sports activities. I hope that those proposals will be considered carefully.
	We have made some detailed suggestions. First, we have said clearly that we want a cap on that 750 million. There should be no more take from the lottery as a result of the Olympic lottery games. The Secretary of State has made it clear that he accepts that, and we are grateful for that assurance. Secondly, we proposed that the Government carefully consider the proposal to change taxation on the national lottery to gross profit tax. We know that they were initially very sceptical about that, but I am delighted that the Treasury has now become agnostic about it, and we seem to be getting some support for the idea from the Department for Culture, Media and Sport. According to independent experts from PricewaterhouseCoopers, if such a change were to go ahead, something like 400 million would go back to lottery good causes by 2019, and a lot of that money would be invested before the 2012 games. I am delighted that the Secretary of State has said that he will carry out a review, but I hope that we will have an absolute assurance in the winding-up speech that such a move will be implemented as quickly as possible if the review says that it would be positive for the Exchequer, because of the extra money for the taxpayer, and for lottery good causes. Thirdly, we asked the Secretary of State to examine what he called the grey areas of lottery-style games. Many people who play the national lottery know that a proportion goes towards supporting good causes. However, in recent years gambling operators have introduced lottery-style betting games, which, they admit, are intended to compete with the national lottery. They look like national lottery games, but they are run solely for commercial gain and they reduce the number of national lottery players. Independent experts have shown that if we can eliminate those games so that players switch back to the national lottery, it would mean, on a conservative estimate, an extra 44 million a yearmore than 500 million by 2019for good causes.
	Fourthly, we asked for clarification of a memorandum of understanding between the Secretary of State and the Mayor of London. The House is well aware that the sale of land and buildings will follow the Olympics and Paralympics. We are all interested in knowing how much money that will generate. There has been much debate today, but the speculation is no different from that of many months ago. I would not like to judge which of the many experts is right about the eventual figure, but if there is more information at any stage, we would like to see it. However, the memorandum of understanding made clear the order in which money would be repaid to the lottery good causes, the LDA and the Mayor of London. I should like to have an assurance, which I have not yet received, that the memorandum of understanding is binding, and that no attempt will be made to try to change the way and the order in which money is paid out.
	Let me give one example to which the Secretary of State might respond. The memorandum of understanding makes no reference to funding the maintenance of the Olympic park after the 2012 games. Will he assure us that there will be no sudden take from the land sale money that duly arises?
	We wanted to persuade the Secretary of State to scrap the Olympic lottery distribution body. We would save 2 million by scrapping a body that simply takes money and hands it back to the Olympics. We know where the money needs to gobut the Secretary of State said that he was not prepared to budge on that small issue.
	However, we have received assurances on the four other key issues, together with assurances about there being no further take, and the provision of more detailed budgetary information, and we are delighted. We now have a sensible package of measures on which to move forward. If we add the possibility of additional money through the third Camelot licence, leading to between 600 million and 1 billion extra for good causes, and the modest but none the less welcome increase in grant in aid to various bodies, we now have a package that assures us that much of the money taken from good causes will go back to them. Indeed, if all our proposals are accepted, in due course they will get more than was taken from them, and more than 400 million will be returned before the 2012 games. That is a good outcome of the discussions between us and the Secretary of State. On that basis, we are prepared to support the Government.

Several hon. Members: rose

Mr. Deputy Speaker: Order. Hon. Members are making it difficult for the Chair because they did not notify Mr. Speaker that they wished to take part in the debate. I must be fair to those who did so. I owe a responsibility to the Chairman of the Select Committee, whom I shall call next. The winding-up speeches will be approximately five minutes each, so, with some co-operation, we should be able to achieve reasonable participation.

John Whittingdale: I will do my best to keep my remarks brief. As so often, it is a pleasure to follow the hon. Member for Bath (Mr. Foster). I agreed with much of what he said. As the Secretary of State knows, when the Government first decided to bid for London to host the 2012 games, I held the position now filled by my hon. Friend the Member for South-West Surrey (Mr. Hunt). At that time, I expressed the Conservative party's support for the Government's decision to bid. I remain of the view that it was the right thing to do, and that the Olympics will greatly benefit the country. The Secretary of State and the Minister for the Olympics occasionally interpret any criticism of the preparations for the games as a lack of support for their coming to London at all, so I put my support on record at the outset.
	I am encouraged by the evidence that we in the Select Committee have received that progress is on track so far. Although the costs have escalated, at least the timetable appears to have been observed. The Secretary of State and the Minister for the Olympics would have been encouraged had they joined us this morning when we took evidence from the five host boroughs and heard the enthusiasm with which their leaders spoke of the benefits that they saw coming to their part of London.
	However, if more than 5 billion is being spent in an area, it is not surprising that the local people should expect quite a lot of benefits to come from it. The challenge for the Government has always been not just to ensure that there are benefits for that part of London, but to persuade the other parts of the country that they will benefit, too. In that respect, the order before us will not assist, because not only will there be no huge investments outside London, but money is being siphoned from the potthe national lotteryfrom which other parts of the country might otherwise have benefited. That will jeopardise part of the soft legacy, which is the Government's aim, and it comes on top of the Department's recent decision to cut the amount of money going to VisitBritain, which will jeopardise another part of the soft legacy of the Olympic gamesthe tourism potential.
	When the Government originally drew up their funding package, it was to meet an estimated cost of 2.375 billion, of which 1.5 billion was intended to come from the lottery750 million from the new game, 340 million from the sports distributors and 410 million from the non-Olympic distributors. In the report that the Select Committee issued a year ago, we expressed concern about the impact that the original 1.5 billion take would have on good causes, in particular sport. We quoted the Central Council of Physical Recreation, which my hon. Friend the Member for South-West Surrey (Mr. Hunt) has also quoted, which said that the move
	would...reduce...funding available to all other aspects of community sport,
	which would
	undoubtedly be detrimental to achieving the lasting legacy of sporting participation.
	We also received evidence from the non-Olympic distributors, such as the Heritage Lottery Fund and Arts Council England, which expressed concern about the money going into the Olympic pot that would be lost to them. That was why the Select Committee concluded that any further transfer of funds out of the lottery to support the Olympics would penalise good causes yet further. We made it clear that that was not our preferred option.
	When the Secretary of State had to reveal a budget of 9.325 billiona considerable extra cost, which had to be found from somewhereit was with some trepidation that we read reports that the extra would come from the lottery. It appears that the Minister for the Olympics achieved a better deal in her negotiations with the Treasury than some suggested she would. We should therefore be grateful that we are debating an order that will take only a further 675 million from the lottery, and not an even bigger sum. However, there is no doubt that taking 675 million, in addition to the original 1.5 billion, will have a further detrimental effect. Indeed, that sum alone will result in 420 million being taken from Big Lottery Fund, 90 million from the Heritage Lottery Fund and 63 million from Arts Council England. Those sums cannot be taken out without a detrimental effect on those bodies' funding programmes. That will make it harder to sell the Olympic games to the other parts of the country, which are not seeing the immediate benefits from the investment in east London.
	At the time of the report last year, the Committee suggested that the rise in land values that would undoubtedly result from such investment should not benefit just the London Development Agency. We therefore very much welcomed the then Secretary of State's announcement, a few months later, that part of the money that would become available from the sale of that land in due course would be repaid to the lottery. As has been said in this debate, she set out a clear order of priorities for how it would be allocated.
	It appears, however, that some doubt has arisen over how much will be available. The Mayor's office, which gave evidence to the Committee this morning, dismissed the story in  The Times and said that it had always been the case that the amount of money raised from land sales could be between 800 million and as much as 3 billion. However, when I look at the memorandum of understanding I see no mention of the word if in relation to the land sales achieving the necessary 1.8 billion to repay the London Development Agency and the lottery distributors. In fact, it uses clear language, stating:
	the National Lottery income...will be re-paid,
	and that the LDA will be reimbursed.
	However much it is now suggested that this does not represent a new story, a degree of uncertainty that did not previously exist seems to apply to the likelihood of the lottery being reimbursed for its contribution. That is obviously a matter for concern. Even if the money is repaid in full, it seems unlikely that that will happen until about 2030. The lottery will therefore have to put up with a substantial hit for a considerable time, and it will not be a great reassurance to the bodies that hope to receive lottery funding to hear that the amount of money available will increase again by 2030.
	The one other concession that the Secretary of State has made this afternoon, which I strongly welcome, is his pledge that the Treasury will look again at the case for a gross profits tax for the national lottery. I am always slightly suspicious when I am told that a taxation change will increase not only the amount of revenue to the Exchequer but the amount available to good causesbut PricewaterhouseCoopers has apparently assured us that that would be the case, and that should be grounds for at least examining the idea. The Secretary of State has clearly been extremely persuasive in his discussions with the Treasury, so perhaps he could push his luck and ask whether it will reconsider its intention to have its tax take from the national lottery game. That money, too, could provide extra funding that could be better used elsewhere.
	I welcome the Secretary of State's concession, and I also strongly welcome his pledge that there will be no further raid on the national lottery. I hope that that will not be necessary, in any case. Of the 9.375 billion, 2.75 billion represents a contingency fund, and we all hope that that fund will not be fully drawn down. We are alarmed, however, by the evidence that has already been given by the permanent secretary in the Department, who stated that he expected that it might well all be necessaryand the Minister has said that she cannot guarantee that the final figure might not prove even higher. We understand that she can offer no such guarantee. I regret the necessity for this order, as I still believe that the Government could have found other sources for the funding that would have been less damaging to the good causes, and I must express my strong hope that it will not be necessary to come back to this issue, either to raid the national lottery or to find some other source of funding because the bill has risen even higher than it is currently predicted to do.

Pete Wishart: If there were a gold medal for the mismanagement and botching of a large infrastructure project, it would go to this Government and their Olympic ambitions. This is one project that is in need of a performance-enhancing drug

Barry Gardiner: rose

Pete Wishart: Let me get started. I have a long way to go yet.
	This project is in need of a performance-enhancing drug, but that is not what will sustain the Olympicsthe lottery will sustain them. Let us be clear about what we mean when we refer to the lottery. The lottery supports good causes in each of our constituencies, including the grass-roots sports events that we regularly open and visit and the organisations that traditionally support the disadvantaged, the dispossessed and the marginalised. It is they who will lose out to pay for this massive infrastructure and regeneration project in London.

Angus MacNeil: Is my hon. Friend aware that, in the Outer Hebrides, my constituency alone will lose about 1 million on a per capita basis? What benefit does he think will be directed to the Outer Hebrides from the London Olympics?

Pete Wishart: That is the kind of question that I, too, am asked. The Secretary of State sits there laughing as he listens to the difficulties facing my hon. Friend. My constituents ask why we, in Perthshire, should pay for this massive infrastructure and regeneration project in London. I do not know the answer to that question.

Barry Gardiner: The hon. Gentleman talks about the monumental fiasco of the Olympics, but will he enlighten us about whether the resignation today of the chief executives of SportScotland and the Scottish Institute of Sport is another indication of monumental incompetence? Could they be telling the SNP to get its own house in order?

Pete Wishart: I wish I had not bothered giving way to the hon. Gentleman, which is all I can say about that contribution.
	What we nationalist Members say is Not one penny more. In fact, we did not want one penny in the first place, as we disagreed with using the lottery to pay for the London Olympics. We have consistently taken the approach that we do not want the Olympics to decimate good grass-roots causes in our constituencies. That is why we will oppose the motion this evening.
	I am disappointed that the Conservatives and the Liberalsthe so-called larger Opposition partieshave been bought off so cheaply. I can hardly believe that they are prepared to believe in the Government's commitments. This is a Government who told us that the Olympics would cost 2.3 billion, whereas actually they will cost more than 9 billion. How can anyone believe a word the Government say? We should protect our good causes and grass-roots support this evening and I hope that, even at this late stage, Conservative and Liberal Members might think about joining us.
	As I say, we have been wholly consistent. I believe that it is wrong, unfair and counter-productive to use the national lottery to pay for the Olympic games and the associated regeneration in London. The matter was first raised in 2004 when we debated the Horserace Betting and Olympic Lottery Bill, and only the Scottish National party expressed concern about it. Every other party was carried away in the euphoria of securing the games, but we warned that it would be dangerous to our good causes and to our grass-roots support. The other Opposition parties were totally silent, so it is perhaps not too surprising that they are not going to act to save those causes this evening. That euphoria has now long gone and there is now a healthy scepticism about everything to do with the Olympics. Thank goodness that at least the other Opposition parties are prepared occasionally to question the Olympic budget. Are we to believe that there will be no more black holes? When that was raised today, the Secretary of State brushed it aside as though it were of no concern whatever. As sure as night follows day, however, other black holes will emerge.

Andy Reed: As the hon. Gentleman knows, we spent many an hour in Westminster Hall and elsewhere debating this issue. I am delighted to see that he is sticking to his position, but we are where we are today and we need to know the position of the Scottish National party. If the SNP does not vote for this motion, is it saying that it wants the Olympics to collapse in a heap? Is it willing to bid for it? Real politics is about making tough choices. Where is the SNP going if it will not allow lottery funding to be used in this way?

Pete Wishart: I am grateful for that intervention because, as the hon. Gentleman knows, we have debated the issue on several occasions over recent years and we have consistently said that London stands to gain from the fantastic legacy that the city will receiveregeneration of the east end, a fantastic new infrastructure and so forthso it is London that should pay. London is about the richest city in the world, so London should pay for these games.

Adam Price: I have an alternative funding proposal. Why not slap a windfall tax on the bonuses about to be sent out next week by the likes of JP Morgan and Citigroup? If there is to be an extra burden, should it not fall on the richest citizens in one of the richest cities in the world rather than on the weak, the disadvantaged and the poor?

Pete Wishart: As always, my hon. Friend makes a very powerful point. There are many creative solutions. London is the richest city in the world, so why should the poor, the disadvantaged and the underprivileged in my constituency pay for this infrastructure and regeneration in London?
	Let us go back to 2004, when we were told about this 410 million from the lottery. That had as much credibility as a Labour party fundraiser. Nobody believed it then. The initial budget could not even be said to have been drawn up on the back of a fag packet. Indeed, that would be to do a gross disservice to fag packets the world over! It was a total fantasy: it started as a fairy story and it has ended as the darkest of tragedies, with an estimate of 2.3 billion going up to 9.2 billion. That is what we are dealing with. We are asked to believe that this is now the end, but where will it all stop and when will the Conservatives and the Liberals say, Enough is enough? So far as we are concerned this evening, enough most certainly is enough.
	We have examined the position very carefully, and have found that Scotland's contributionthe London levy that Scotland is to pay at the expense of our good causes and grass-roots sportswill be 184 million. As I said earlier in an intervention, SportScotland alone will lose 13 million, at a time when we have the Commonwealth games to pay for.
	The Secretary of State can relax: I am not going to chap on his door asking for 9 billion for the Commonwealth games. I am not even going to ask for 1 billion. What I think fair and reasonable, however, and what I think the Minister should consider, is for some of the money that we are losing through the London grab for the Olympics to be returned to us so that we can pay for our games in Scotland. Why, when we are to have games in Scotland, are we losing 187 million of our money for grass-roots sports and good causes to pay for games in London? It is unfair, and I should like to hear what the Secretary of State has to say about it.
	What is the cost to everyone? The Alliance, formerly the Coalfield Communities Campaign, estimates that the eventual cost will be more than 2 billion. We have analysed all the local authority areas in Scotland, and we have discovered that the cost to my local authority, Perth and Kinross council, will be some 5 million. Every single person in the United Kingdom will have to pay 33: that is the true cost of the London levy that will be imposed on us. When London Members get up and talk about this mythical subsidy for Scotland and all the disadvantages for London and the rest of England in comparison with Scotland, we will point out that this is a real and tangible London subsidy.
	I hope that the Conservatives and Liberal Democrats will vote this measure down. For us, it is a watery grave too far. We will stand up for the underprivileged and the dispossessed. We will ensure that their money is not lost. We will vote against the measure, and I urge the Conservatives and Liberal Democrats, even at this late stage, to join us in the Lobby.

Hugh Robertson: I think it fair to say that the Olympics remain the world's greatest sporting event, and an important showcase for both the host city and the country as a whole. However, it is also sadly the case that successive Olympic gamesnotably those in Sydney, Athens and now Londonhave radically overshot their initial budgets, and in view of that it is probably not surprising that this has been a heated and at times controversial debate.
	Let us start with the positives. Two main themes have run through the speeches of Members on both sides of the House. The first, which I think extremely positive, is the support for the Olympics that exists across the main political parties. That support, first evident at the bid stage, continued throughout the passage of the London Olympic Games and Paralympic Games Bill, and remains intact. There are of course differences of opinion over the control of the budget and policy issues such as the legacy for sport, but support for the concept of 2012 is still intact, and I hope that the Minister for the Olympics will feel able to offer the International Olympic Committee assurances to that effect.
	The second main theme replicated across the House is widespread recognition of the benefits brought to the country in general, and to good causes in particular, through the national lottery in the decade or so since it was introduced by John Major's Government. In our view it is vital that the lottery does not become a reservoir into which Government can dip when money is needed, or become the poor man's tax that some commentators have dubbed it, as that would inevitably affect its popularity and thus the amount of money that it is able to distribute to good causes.
	As only a short time is available, it makes sense to be entirely clear about what we seek from the Government, and why we are seeking it. As always with London 2012, our concern centres on two main issues, the budget and the legacy, particularly the mass participation sports legacy.
	Tonight is not the occasion on which to examine why the Olympic budget went so badly wrong. However, as the Minister for the Olympics will confirm, we co-operated closely with the Government over the London Olympic Games and Paralympic Games Bill, and helped them to get it through in record time. That earned us a commendation from the IOC. I hope the Minister will understand that, given the former Minister for Sport's countless assurances in Committee and on Report that the original budget was robust and deliverable, we were dismayed to discover that that was so dramatically not the case. For that reason, as well as any Opposition's democratic remit to hold the Government to account, it would be wrong for us not to seek reassurances over the new budget.
	The Minister's recent approach, particularly since November, has helped immeasurably, and I wish publicly to record my thanks to her for that. However, in order to build on that, we want three simple reporting mechanisms: first, a six-monthly report to Parliament; secondly, quarterly ministerial and shadow ministerial briefings; and, thirdly, monthly cash flow forecasts. I cannot see why any of those demands should cause the Government any problems. I am perfectly happy to receive those reports on Privy Council or confidential terms, if the release of any details might affect commercial sensitivities.
	There is also the matter of the legacy, which is why the national lottery is so important. Without the lottery, the amount that can be done in legacy terms will be dramatically less than it would be otherwise. For that reason, I entirely welcome the Secretary of State's announcementor concessionthis afternoon that the lottery will not be hit again to pay for future cost overruns; I thank him for that.
	Given that concession, for my party this debate comes down to one simple point: will the Government commit to the reporting mechanisms that I have just laid outa six-monthly report to Parliament, quarterly meetings at ministerial and shadow ministerial level, and a monthly cash flow forecast? If they can give us that assurance, despite our concerns over the budget and the national lottery, in recognition of the Secretary of State's earlier concession and in the interests of maintaining the cross-party consensus that we have all worked so hard to achieve, we will not vote against the Government tonight.

Tessa Jowell: This has been a good debate, with a frank airing of views from all parts of the Chamber. At least the Scottish National party is consistent. It opposed bidding for the games; it has opposed the Olympic games for the United Kingdom in London root and branch ever since the Government first made the proposition. It, therefore, will have to answer to the seven out of 10 people in Scotland who support the Olympic games. It will also have to answer to its talented young elite athletes who hope to represent Great Britain in Beijing and then to bring glory to Great Britain at the Olympic games in London.

Barry Gardiner: My right hon. Friend says that the SNP has been consistent, but does she recall that on 6 June 2005 the SNP claimed that it
	gives full support to the London Olympic bid and wishes those leading the London 2012 Olympic bid the very best of luck?
	That does not sound like consistency to me.

Tessa Jowell: My hon. Friend's excellent research has probably found a sotto voce endorsement by the SNP. However, the SNP is against the Olympic games, and I think it is fair to say that it is the only party in this House that holds that view.
	Let me begin with the substance of this evening's debate: the importance of the trade-off involving the Olympic games, and the decision to divert an extra 675 million from the national lottery to the Olympics. The Government considered carefully before coming to the House with the proposal, but just as the Conservative party determined that the millennium would be a further good cause benefiting from the lottery for a period of time, so the Government agreed that the Olympics would be a sixth good cause: 20 per cent. of the national lottery was earmarked for the millennium, and a smaller proportion has been provided to the Olympics16 per cent. or 23 per cent. of the overall Olympic budget.
	The safeguards have been addressed by Members in all parts of the House. When I made the announcement in March about revised funding provision for the Olympics, we undertook that no existing lottery funding would be affected, that the Big Lottery Fund would honour its commitment to the voluntary and community sector, and that, in line with the memorandum of understanding, the 675 million would be repaid through land sales. In this debate, we have dealt thoroughly with the prudent assumptions on which those calculations were madeand the Mayor clearly set them out in April last year. My right hon. Friend the Secretary of State has also made clear the commitment that there will be no further diversion of funds from the lottery good causes to the Olympics.
	A point was made about legacy transformation. The costs for legacy transformation are provided for within the overall funding package, and the Mayor has already made a commitment of 10 million towards the costs of running the Olympic park. Work is under way to establish governance arrangement for the legacy, the park and so forth. I can also give an assurance that once its job is done in 2012, the Olympic lottery distributor will be wound up.
	Much has been said in the debate about the importance of cross-party support. That is critical to the success of the Olympics, but it must be proper cross-party support. The right to scrutinise and ask questions must not be surrendered, but there must also not be the kind of opportunistic flip-flop that we have witnessed this afternoon, and figures must not be misrepresented, such as those for the cost of the Olympic stadium, which have been carefully and meticulously explained to Opposition spokesmen. I hope that from this evening there will be a new resolution to make this cross-party consensus work properly, and to maintain proper scrutinybut to do so on an honest basis that reflects the information that has been provided to Members in briefings.
	We will provide six-monthly updates to Parliament and quarterly briefings to Opposition Members. Next week, the Olympic Executive will publish its first ever annual report, which will set the baseline for that, and I pay tribute to the Select Committee for its rigorous scrutiny in that regard. We will provide continuing and regular financial briefings to Opposition Front Benchers.
	This matter should not be seen as a battle between the Olympics, arts, heritage and sportthe debates on it in this House should not allow that. We decided to bid for the Olympics because we knew that it would give us an opportunity to enhance every aspect of our national life right across the United Kingdom. Through the cultural Olympiad, there will be events and celebrations across the country showcasing the British talent and creativity of which we are so proud, and the lives and opportunities of millions of children in this country will be transformed through sportparticularly those of children living in some of the most deprived circumstances in the poorest parts of London in the boroughs most directly affected. Two thirds of the money that will be spent on the Olympic park will go on regenerating an area that has been wasteland for generations.
	Tomorrow, we will launch a new business opportunities network, extending the practical opportunities for businesses right across the UK to be part of those economic opportunities. Those are the reasons why public support for the UK hosting the games is so high: the Olympics will enthral the nation and inspire a generation

It being one and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker  put the Question, pursuant to Standing Order No. 16(1) (Proceedings under an Act or on European Union documents).
	 The House divided: Ayes 357, Noes 9.

Question accordingly agreed to.
	 Resolved,
	That the draft Payments into the Olympic Lottery Distribution Fund etc. Order 2007, which was laid before this House on 25th October, in the last Session of Parliament, be approved.

EUROPEAN COMMUNITIES (FINANCE) BILL (PROGRAMME) (NO. 2)

Motion made, and Question put forthwith, pursuant to Standing Order No. 83A (Programme motions),
	That the Order of 19th November 2007 (European Communities (Finance) Bill (Programme)) be varied as follows
	1. The following provisions shall have effect in place of paragraphs 3 and 4 of that Order.
	2. Proceedings in Committee and any proceedings on consideration shall (so far as not previously concluded) be brought to a conclusion
	(a) two hours after the commencement of proceedings on the Motion for this Order, or
	(b) one hour before the moment of interruption,
	whichever is the later.
	3. Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion
	(a) three hours after the commencement of proceedings on the Motion for this Order, or
	(b) at the moment of interruption,
	whichever is the later. [Mr. Blizzard.]
	 Question agreed to.

Orders of the Day

European Communities (Finance) Bill

Considered in Committee.

[Sir Alan Haselhurst  in the Chair]

Clause 1
	  
	Extended meaning of the Treaties and the Community Treaties

Question proposed, That the clause stand part of the Bill.

Andy Burnham: I do not intend to delay the Committee for long, but I think that it is worth setting out the arguments that we went over at some length on Second Reading and the key points that constitute the own resources decision that the Bill will incorporate into UK law.
	That decision was agreed more than two years ago, and it is fair to say that there has been considerable opportunity for Members on both sides of the House to form a view on it. It is now make your mind up time. This is not a Bill that we can go through line by line and take the bits that we like and remove the bits that Members may be less fond of. We have either to accept the package that was negotiated in December 2005 or signal a wish to go back and renegotiate it.
	It is important to say at the outset that there may be seductive

Peter Bone: Surely if we reject the Bill tonight, the current system will stay in place and there will be no need for renegotiation?

Andy Burnham: In many ways, that betrays the problem with the Opposition's logic. The hon. Gentleman suggests that it is possible for this country unilaterally to ignore the ratification deadline and just carry on as if nothing has happened, but that would trigger a major reassessment of our relationship with the European Union [ Interruption. ] That might indeed be what he wants, as he confirms, but if that is his real objective, his time would be better spent focusing on the 15 days that will be devoted to the EU reform treaty on the Floor of the House. I guess that his diary is already clear for each and every one of those days.
	That is the point. This is not a pick-and-mix opportunity. The sweet shop is not open; people cannot just take what they like and leave the rest. We will either accept the measure or we will not. Ingenious attempts to create a third way, as the Opposition new clause seeks to do, are simply unworkable and would lead to the situation that I outlined.

Ian Davidson: Do the Chief Secretary and the Government intend consistently to tell us that when European Union proposals are put in front of us, we always have to either take them or leave them, and that if we are unhappy with them in any way the only alternative is to throw into the melting pot our relationship with the European Union? That surely undermines the credibility of the idea that Britain is a partner that can argue its corner.

Andy Burnham: As my hon. Friend knows, there are ample opportunities to debate European business in the House, both in Committee and in the Chamber. The financial perspective was debated at some length following the Council meetings at which those matters were debated. The then Prime Minister came back to the House and debated those matters in this Chamber. The House has had plenty of opportunities to debate the precise shape of the own resources decision and whether to accept it. My point is factual. My hon. Friend will agree that we cannot now go back through the own resources decision and seek to insert amendments from this Committee [ Interruption. ] There is an amendment; forgive me, it is a new clause. My point is that we will either accept the decision tonight or we will not.

Richard Shepherd: The Chief Secretary has forgotten the historical function of this House, which is to consent to the expenditure of money. That is the supply side of the question. It is not for the Government to assert that they can do something unless they have the consent of the House. That is the constitutional position. This is a debate. If the House has the courage and determination to say that the decision reflects an inadequate negotiation by the present Administration and by the previous Prime Minister, it has the right to reject it.

Andy Burnham: That is precisely the point; it is what I said at the start. Hon. Members on both sides of the Committee have the opportunity to express precisely that opinion this evening. The Committee has that ability, but we cannot go back and renegotiate the points contained in the own resources decision or put on hold the ratification of the decision pending the conclusion [ Interruption. ]I ask the hon. Member for Aldridge-Brownhills (Mr. Shepherd) to hear me outpending the conclusion of the budget review that was also set in train

Philip Hammond: On a point of order, Mr. Deputy Speaker. The Chief Secretary is suggesting that it will not be possible to insert new clause 1. If that were the case, surely the new clause would not have been selected this evening?

Alan Haselhurst: I can say to the hon. Gentleman that I have selected new clause 1 for debate and, if time allows, it will be debated.
	While I am on my feet, and also on a point of order, perhaps I should remind hon. Members that we are sitting in Committee and that the appropriate form of address to the occupant of the Chair is not Mr. Deputy Speaker, but either Mr. Chairman or Sir Alan. I am perfectly happy with the former.

Andy Burnham: Thank you, Sir Alan. I do not disagree with the point made by the shadow Chief Secretary. Of course, it is well within the rights of the Committee to adopt the new clause. My point is that that would send the clearest of signals that the UK was unilaterally opting out of the own resources decision. The conclusion of the budget review process, which the new clause mentions, will take some time, I would guess. The date for the ratificationthe agreed date by which all member states should incorporate the own resources decision into their domestic legislationis 1 January 2009, which is less than a year away.

Richard Shepherd: I am extremely grateful to the Chief Secretary for giving way again. There is a fundamental point. Sir John Major once went to Edinburgh and agreed certain finance arrangements, and it was claimed that the whole of Parliament was bound by the Prime Minister's undertaking to European leaders. That cannot ever be the position. Parliament is the authority through which the decision is made. The Government have entered into an agreement, but whether they can honour it or not is entirely dependent on how the House responds.

Andy Burnham: The hon. Gentleman misunderstands mewilfully, I believe. I tell him directly that the Committee and the House have the opportunity to reject the proposal this evening. That is his right as a Member of the House and it is the right of all hon. Members. My point was that we cannot go back and renegotiate the own resources decision line by line.

John Redwood: Given that the decision was negotiated some time ago, perhaps when the Government agreed to it they thought that they could afford to give away 10.5 billion of hard-pressed taxpayers' money. However, they now cannot afford a decent pay rise, awarded by an independent commission, for the police and they are achieving record levels of borrowing and taxation. Should not the Chief Secretary reconsider, in order to be a prudent manager of our money?

Andy Burnham: As the right hon. Gentleman knows, a very prudent decision was taken to increase public expenditure at a lower rate than predicted levels of growth in the economy. That was the decision made in the recent spending review. The forecasts for the part of the financial perspective that covers the spending review take into account the projected figures. I ask him to consider the fact that the Government have taken prudent decisions within a tighter fiscal framework, overall.

Vincent Cable: Although the Liberal Democrat approach is different from that of the Conservatives, they are asking perfectly legitimate questions about parliamentary scrutiny. Will the Chief Secretary explain what would happen if the ratification deadline was not met by January 2009? Will he talk us through the nuclear option? What exactly will happen, legally and financially, if that deadline is not met?

Andy Burnham: I can probably do better. I refer the hon. Gentleman to paragraph 11 of the explanatory notes, which states:
	If any Member State fails to adopt the new Own Resources Decision by 31 December 2008 then the current Own Resources Decision...continues to operate until such time as the adoption process is completed
	 [ Interruption. ] Opposition Members have reacted, as someone said, as though that were a complete vindication of their position. Such an outcomeit is what Opposition Members want, although they are not saying sowould precipitate a complete breakdown in relationships with the rest of the European Union. I am led to believeI shall return to the House to correct this if I am wrongthat this country has never failed to ratify an important decision agreed with European partners.
	Let us be clear what Opposition Members want. They want that showdown debate with the European Union. If that is the case, they should come out and say so.

Stewart Hosie: I agree with the thrust of the Bill. I am a pro-European who wants to see the European Union work. I want the poorer parts of eastern and central Europe to benefit from objective funding like that from which we have benefited in the past, but I also want to see proper reporting of how the money in Europe is spent. I am not convinced that the review proposed in the new clause cannot be carried out in the year left before ratification is required. I do not want a showdown. I want proper information, and the Minister must be more convincing when he asserts that we cannot conduct the proposed review in a year. I do not think that anyone really believes that.

Andy Burnham: The deal was agreed more than two years ago, and it is important that the UK honours its obligation to ratify it by the agreed deadline. The House has an opportunity today to debate the pros and cons of the agreement, and I have explained that every hon. Member has a right to accept or reject it. As for scrutiny, the hon. Gentleman will know that in response to the excellent report from the House of Lords, the Government have made a commitment to publish a consolidated statement on EU finances. He is right that the debate could benefit from greater transparency and accountability, and the Government have agreed to facilitate that.
	However, it is an entirely different thing to say that a long debate should be held over the course of the next year. That would amount to an attempt to unpick the 2005 agreement, which was based on three pillars. The first pillar was expenditure, or the EU budget. The second was the own resources decision, which had to do with how those funds would be raised. The third element, for which this Government pressed very strongly, was the insistence that there should be a review of the entire budget process in future.
	The documentation supporting the negotiation process makes it clear that nothing is agreed until everything isin other words, that we cannot accept the bits of the negotiation that we like and reject the rest. That was how the negotiations were conducted, and it is not possible for us to go back and say, We like this bit but we don't like the rest.

Rob Marris: I am grateful to my right hon. Friend for his patience in explaining the process. It is clear that the House could choose to reject the treaty, with the result that the UK would have to renegotiate it. That would be unwise, in my opinion, but will he assist me by moving on to the substantive questions? How much will the treaty cost us, and on what will the money be spent? I understand that it will go towards funding enlargement. A third question concerns the treaty's effect on duties on commodities, such as sugar, that are produced by non-member states. Given the EU's system of external tariffs, that is an especially sensitive matter around the world.

Andy Burnham: I am grateful to my hon. Friend for his intervention and for his request that we move on to the detail of the own resources decision. That is what I intend to do.

Mike Hancock: Earlier, the Chief Secretary said that the former Prime Minister brought the deal back to the House for debate and presumably a vote. Will the Chief Secretary remind the Committee of when that debate took place and of the result of the vote? The best that we managed was a statement from the former Prime Minister. We did not get a debate on this issue.

Andy Burnham: I seem to remember that the former Prime Minister came back to the House on more than one occasionafter the Council in June and again in December, once the decision was made. I accept that the latter occasion was after the event, but the debate on these matters after the June Council was very live and the House had an opportunity to influence events. I repeat that there was a vote on Second Reading, and hon. Members will have other chances in the votes to be held this evening to express their views as to whether they believe the agreement represents a good deal for Britain. I am not going to assert that it is, as all hon. Members must arrive at their own judgment. If they decide to reject a deal that was negotiated in good faith, however, they must bear in mind the damage that might be done to Britain's interests in Europe.

Peter Lilley: I do not think that the Minister realises that the opposition expressed this evening by members of various parties would strengthen the Government's hand. The rebate at the centre of the argument was won by Mrs. Thatcher because she was strong, and it was conceded by the former Prime Minister in the weak days of his dying regime. If the Minister were forced to go back to Brussels because this House did not accept the dilution of the rebate, his position in negotiations for a better deal would be very strong. Mrs. Thatcher was able to get what she wanted because she had the House behind her.

Andy Burnham: I do not believe that that is how the previous Conservative Government conducted their European negotiations. The right hon. Gentleman will find that there was no showdown and that no macho statements were made. Much of what that Government did was very pragmatic, and that is the same for all Governments. Their approach was based on compromise, with a view to achieving the best available solution. His memory of the period may be rather selective, as I do not believe that it is based on fact.
	The deal under discussion preserves the basis of the Fontainebleau Council, at which it was decided that the UK would receive a rebate on all spending in the 15 countries that then made up the EU. The current deal retains that approach, with the difference that it takes account of enlargement and proposes a different financing mechanism for the enlarged EU.
	The Conservative party says that it supports EU enlargement

Peter Lilley: indicated assent.

Andy Burnham: The right hon. Gentleman nods. Well, this is the decision that pays for EU enlargement. The Opposition cannot say that they support enlargement if they do not accept that it must have a financial cost.

Philip Hammond: Will the Minister explain how both the current and former Prime Ministers were able to say in May and June 2005, when the deal had been done and the EU had already been enlarged, that the UK rebate was fully justified and non-negotiable? That was their position as they went into the negotiations. They did not begin them saying, If we want enlargement, we'll have to give up the UK rebate.

Andy Burnham: We went over this on Second Reading. The hon. Gentleman may not have understood that the own resources decision clearly preserves the basis of the rebate, as I have described. He does not want to acknowledge it, but the rebate's value will rise as a result of the deal that has been reached. That sounds like a pretty healthy and decent outcome to me.

Bernard Jenkin: Will the Minister give way?

Philip Davies: Will the Minister give way?

Andy Burnham: I shall give way to the hon. Member for Shipley (Philip Davies), the leading light of the Better Off Out group.

Philip Davies: I am grateful, as no one on the Conservative Benches, let alone a Minister, has ever before described me as a leading light. The hon. Member for Wolverhampton, South-West (Rob Marris) urged the Minister to get to the crux of the matter, which is how much extra the Bill will cost the British taxpayer. Will he therefore make that cost explicit, and will he say why the British taxpayer should pay more money to an organisation whose accounts have not been signed off by the auditor for 13 years running because of all the fraud that goes on?

Andy Burnham: I am happy to acknowledge that the hon. Gentleman is a leading light and the intellectual driving force in the Better Off Out groupif that is not a contradiction in terms.
	To reply to the hon. Gentleman directly, the cost of disapplying the rebate to non-agricultural spending in the accession countriesthat is essentially what we are discussingis capped at 10.5 billion. That is the maximum cost of those changes. However, as I said to the right hon. Member for Hitchin and Harpenden (Mr. Lilley), that is the consequence of a policy of enlargement. It is not possible to argue that enlargement is a one-way process from which the UK gains no benefits. Later, I shall give the Committee figures showing that, already, British companies are doing significantly more trade with companies from the accession states. New opportunities have opened up for British business, as has happened after every round of enlargement, such as when Spain, Sweden and the Republic of Ireland joined the EU, so it is good for the British economy. That contrasts with the view often expressed by the Conservatives that it is a one-way street with no benefits for this country.

Rob Marris: My right hon. Friend spoke briefly about the origins of the rebate. Was it not the case that Mrs. Thatcher was able to negotiate the rebate because the structure of the UK economy in those days was markedly out of line with the structure of the economies of France in particular, and of Germany? Those structural differencesthe differing proportions of GDP raised from the agriculture sector in contradistinction to that raised from industry and the service sectorhave changed, particularly in France and Germany. The rebate negotiated by Mrs. Thatcher and the basis on which it was negotiated were almost bound to change over time, as the economies of those other main rich western members of the EU changed.

Andy Burnham: My hon. Friend is absolutely correct. The point he urges me to move on to, as he did in his previous intervention, is how the decision that we are debating to some extent reforms the way in which the own resources decision is constructed. That is what this decision does. For example, the current arrangements for VAT-based contributions are amended in the own resources decision, with the maximum call-up rate reduced to 0.3 per cent. The effect of that is that member states' residual contributions based on gross national income will increase, further developing the trend toward fair and transparent contributions. People might say that that is only a small step forward, but that is how we have to approach such matters. We make progress where we can.
	The decision also contains some reform of the common agricultural policy. That, too, is welcome, but it is clear that this country does not believe that the reform is anywhere near enough. That is why we secured the overall budget review as part of the overall package. It was clear at the time that none of the package was agreed until all of it was agreed. There was no pick-and-mix option.

Bernard Jenkin: May I correct the Chief Secretary on a point of fact? The EU had only 12 member states at the time of the Fontainebleau agreement, since when we have had several rounds of enlargement and continued with the same rebate mechanism. There was no conditionality based on enlargement to rich or poor countries during that period. The present proposal is a wholly new departure, which flies in the face of the assurance that the then Prime Minister gave the House:
	The UK rebate will remain and we will not negotiate it away. Period.[ Official Report, 8 June 2005; Vol. 434, c. 1234.]
	That is what he said. Why have the Government broken that assurance?

Andy Burnham: We have been over this ground already today. We have preserved the basis of the rebate. The hon. Gentleman is right to correct me. Although I was 14 at the time, I remember Spain joining the EU shortly afterin 1986, I think it was. However, I hope that he accepts that the spirit of my remarks is correct: that the rebate was an acceptable way of calculating fair contributions for the members of the European Union at that time. After the accession of Spain and then the Republic of Ireland, proportionately more structural funding was diverted to those countries to fund their economic development, and the same principle now applies to the accession countries of the former eastern bloc.

Bernard Jenkin: I am mystified by what the Chief Secretary is saying. In previous enlargements, the EU admitted both rich countries, such as Finland and Sweden, and much poorer countries, such as Spain, Portugal, Greece and Ireland, yet the arrangements for the rebate were not changed. The whole premise of his argumentthat we have to change the rebate as a condition of enlargement is, if I may say so, absolute rubbish. His Government are committingto quote the figure that the Library has given us7.4 billion over the planned period for absolutely nothing, other than to advertise their utter weakness. At the same time, they cannot pay the police properly.

Andy Burnham: The hon. Gentleman is advancing a pub argument. He knows that such matters are periodically reviewed by all members of the EU and that the deal that this country secured during the process of negotiation was for approximately 160 billion less than the European Commission originally proposed. Let me ask him a direct question. Did he believe that there would be a cost to EU enlargement? Did he think that the countries of western Europe would have to make a financial contribution to the enlarged European Union? I reckon that when his right hon. Friends were advocating enlargement, they were not thinking, We'll say yes, but not at any cost to the United Kingdom.

Bernard Jenkin: I am grateful to the Chief Secretary for cross-examining me on that matter. I accepted that there would be costs to admitting some of the very poor former eastern bloc countries, but I believed the Prime Minister when he said that the rebate was non-negotiable and that the negotiations on admitting those countries were conducted on that basis. Why have the Government breached their assurance? The Chief Secretary has no explanation, and I have demonstrated that the argument that he has advanced so far is completely false.

Andy Burnham: The hon. Gentleman is entitled to reach that opinion. I said clearly that the own resources decision maintains the basis of the rebate as it was first agreed among the 12 countries of the EU, which shortly thereafter became 15. That rebate has remained in place ever since, and stays in place on that basis. It is calculated on all spendingagricultural and non-agricultural spendingin the EU 15. Different arrangements are made for the accession countries and the rebate is disapplied on non-agricultural spendingessentially, spending to support economic development.
	As I say, the hon. Gentleman is entitled to his judgment that that is the wrong thing to dothat that is not how we should pay for enlargement. In return, I say to him that, as a result of this decision, France's net contributions grow at a significantly greater rate than this country's do. We have secured the rebate, which will increase in value throughout the course of this financial perspective, and, at the same time, we shall have a fair way of funding the enlargement of the European Union. That seems to me to be a good deal for this country.

Ian Davidson: May I clarify whether the rebate arrangement is the same as it was at the time of Second Reading: the rebate is a proportion of the net amount that we hand over to the European Union? If the rebate is increasing, that is an indication that the net amount we are handing over is increasing, so it is not something to be praised, but something to be anxious about.

Andy Burnham: I understand my hon. Friend's point. He is correct that that is how the rebate is calculated, but overall, the European Union budget will grow by about 7 per cent. over the course of the financial perspective. That too is a product of the negotiations led by this country, andto repeat what I said to the hon. Member for North Essex (Mr. Jenkin) a moment agoit is significantly lower than the European Commission's original proposals. The fact that we have secured a lower budget is good news for Britain.
	Opposition Members make pointsI was going to call it hypocrisyabout prudence and keeping spending in check. The right hon. Member for Wokingham (Mr. Redwood) was right to make those points, and I accept thema person in my position needs to listen carefully to what he saysbut I hope that he will acknowledge that the growth of the European budget throughout the period in which his Government were in power was in the double digits.

John Redwood: Too high.

Andy Burnham: We are negotiating a lower and more prudent budget. The last Government failed to do that, as the right hon. Gentleman has just acknowledged.

Charles Walker: The Chief Secretary is being most generous in giving way. Surely he is mistakenthe Prime Minister cannot negotiate a deal. He can make an agreement in principle, but it is not a deal until this sovereign House has voted on it. I shall tell the Chief Secretary what a deal is; a deal is to pay police officers a proper rate.

Sylvia Heal: Order. The scope of this debate is not so wide as to take in police pay.

Andy Burnham: In all matters, the Government will take decisions that support economic competitiveness and strength. That applies to public sector pay as well as to matters relating to the European Commission, and that is the basis on which we move forward.

Peter Bone: Will the Chief Secretary confirm that net contributions under the prudent and great settlement that this Government have achieved will be 3 billion higher in 2011 than in 2006, an increase of more than 50 per cent.?

Andy Burnham: The hon. Gentleman needs to explain himself. Is he saying that contributions will be that much higher each year?

Peter Bone: No, in 2011.

Andy Burnham: The final year? I do not have that particular calculation to hand. I shall come back to the hon. Gentleman on the point, if that helps.
	Before I was interrupted, I was being challenged with the fact that the real increases negotiated by the Conservative Government for the financial perspectives in 1988 and 1994 were 17 and 22 per cent. respectively over the five years of the deals. The right hon. Member for Wokingham said it himselfthey are not figures with which he agreed, or of which he is proud. They stand in stark contrast to this Government's deal.

John Redwood: The Chief Secretary is misrepresenting what I said. I thought that those increases were too high when they were agreed, but the budgets then were much smaller than today. If he thinks that they were unreasonable, surely he is proving that his own budget is a scandal, as it is so much bigger.

Andy Burnham: It is a bit late for the right hon. Gentleman to say that he did not agree with those budget increases. If I recall correctly, he was a member of the Cabinet when the 22 per cent. increase in the EU budget was negotiated. He cannot just wave away any responsibility for that; it is what his Government negotiated in 1994. I would also argue that spending on the common agricultural policy was responsible for a hefty chunk of that increase. Let us remember how things developed over time, and consider the deal in that context.

Rob Marris: I think that the United Kingdom should be a full member of the European Union. One of the very few good things that the John Major Government did was to decide, after winning the debate in the European Union, to go for widening rather than deepeningthat is, for more members rather than closer co-operation between members. That position was taken initially only by the United Kingdom, with some support from Denmark. What surprises me is the following, on which I would like my right hon. Friend to comment. It is intellectually coherent to say, We are against enlargement, as it is to say, We are in favour of enlargementas I ambut recognise that in reality there will be a cost to that enlargement. There is indeed a cost to that enlargement. However, does my right hon. Friend agree that it is not intellectually coherent to say that one is in favour of enlargement, particularly to eastern Europe, where countries are still very poor, but that there will be no cost to that enlargement? That is intellectually incoherent rubbish.

Andy Burnham: I agree entirely with my hon. Friend. That point has been illustrated. Opposition Members were trying to compare that enlargement to the accessions of Spain, Sweden and the Republic of Ireland. By historical standards, the accessions of first the A8 countries and then the further two former eastern bloc countries are completely different, and when taking such a historic step the European Union has to look again at what it does. As my hon. Friend rightly says, it is simply not possible for the Opposition to say that they support the principle but not come up with the financing for it.

Philip Davies: rose

Andy Burnham: How many interventions do the Opposition want me to take? The Opposition's position probably explains why, at the last count, they had one other member in their new European grouping, having previously had two. I hope that the shadow Chief Secretary to the Treasury will enlighten us, if there have been recent additions to the club, but I believe that they are still in a grouping of two in the European Parliament. He looks puzzled.

Ian Davidson: I am grateful to my comrade the Minister for giving way, because it allows us to have a decent debate. On intellectual coherence, does he agree that it is entirely intellectually coherent to be in favour of expansion and of paying the additional moneys associated with it, while not being in favour of a budget that includes the obscene amounts of money spent on the common agricultural policy, not being in favour of the way in which the structural fund is handled, and being in favour of a number of other changes? It is not fair or reasonable to suggest that someone who is in favour of enlargement automatically must be in favour of everything in the budget. It is possible to take another point of view.

Andy Burnham: That is a completely legitimate position to take, but it does not give sufficient recognition to the way in which the European Union operates, which is, almost by definition, through a system of compromise, in which the best available deal for the whole Union is sought. I accept that my hon. Friend may not find the deal acceptable, but, as ever, the position is not ideal; one gets the best possible for one's country, and that is what we have sought to do. Let me go through the detail

Several hon. Members: rose

Andy Burnham: I am being criticised for not making progress, and for taking interventions. As long as the House recognises that, I give way to the hon. Member for Dundee, East (Stewart Hosie).

Stewart Hosie: I think that the House is well aware of the Minister's generosity. I want to bring him back to new clause 1, if I may.

The First Deputy Chairman: Order. I hope that the hon. Gentleman will not take us to new clause 1, because we are debating whether clause 1 should stand part of the Bill.

Stewart Hosie: I apologise, Mrs. Heal. The Minister said that the hon. Member for Glasgow, South-West (Mr. Davidson) set out a perfectly reasonable position, but that the Government could not do as he suggested because the EU sought compromise. I understand that it seeks compromise, and I agree with much of what the Minister said about maintaining the rebate in respect of the EU15 and changing it only in respect of the accession states, with no change to the basis of agricultural funding. However, why does that preclude us from receiving proper information on all the issues, which concern every hon. Member in the House, before ratification is required next January?

Andy Burnham: We have provided that detail. The deal has not been done in secret. Parliamentary answers have been given. An example that springs to mind is a reply given to the hon. Member for Surrey Heath (Michael Gove). We laid out on the record detailed figures about the effect of the agreement on the United Kingdom. I have the figures. There was a table showing gross contribution before abatement, the abatement, total receipts expected and the net contribution. Those are detailed figures that we put before the House.
	I am grateful that the hon. Member for Dundee, East says that he agrees with much of what I am saying. I am not against detailed parliamentary scrutiny of the deal. I began my remarks by saying that the deal has been negotiated. My hon. Friend the Member for Glasgow, South-West (Mr. Davidson) and others may reject it if they believe that it is not good enough. That is the right of any hon. Member, but it is not possible to go back and negotiate line by line with our European partners.

Philip Davies: rose

Andy Burnham: I shall make progress and get some facts on the record about the effects of the own resources decision. Appropriation ceilings will be frozen at the levels set for the 2000 to 2006 budget period. The ceiling on annual appropriations for payments is 1.24 per cent. of EU gross national income, and for appropriations for commitments it is 1.31 per cent. of EU GNI. Appropriations for commitments are forecast to fall below 1 per cent. of EU GNI during the budget period.
	As I said earlier, the current arrangements for VAT-based contributions will be amended, with the maximum call-up rate reduced to 0.3 per cent. By increasing residual contributions based on GNI, that will further develop the transparency and the fairness of the budget.
	Between 2007 and 2013 only, the maximum rate of call on VAT-based contributions will be further reduced for Austria, Germany, Netherlands and Sweden, to 0.1 per cent. for Netherlands and Sweden, 0.15 per cent. for Germany and 0.225 per cent. for Austria. For the same period, gross reductions in GNI contributions of 605 million per annum for Netherlands and of 150 million per annum for Sweden are introduced. Both those amounts are in 2004 prices.

Rob Marris: Would I be right in thinking that the way in which Netherlands and Sweden were able to negotiate the figures that my right hon. Friend has just given relates precisely to the point that I made earlierthe structure of their economies has changed, but all 27 economies in the EU are different, and that must be taken into account, as the UK economy has been, in negotiations with our partners?

Andy Burnham: That is absolutely the point, and the nature of the complex negotiations that were finalised in 2005. The changes that I am outlining show how we have had to be sensitive to the position of other countries, such as the Netherlands which, even after the own resources decision, is still the largest net contributor in percentage terms to the budget per capita. It is important that we keep working to make sure that the budget is as fair as possible. It leaves the UK a mid-ranking net contributor.

Philip Davies: The Minister said earlier that we were not taking into account the way that the EU operates. The problem for him is that we understand far too well how the EU operates. It is a fraudulent and corrupt organisation. He has said in the past that he is concerned about the level of fraud in the EU budget. My constituents cannot understand why he does not say to the European Union, You are not going to get one more penny from the UK until you sort yourselves out and make sure that all the money that you are spending is properly accounted for.

Andy Burnham: The hon. Gentleman makes a very big statement for somebody who represents a party that claims to wish to remain a member of the European Union. He says that it is a fraudulent and corrupt organisation. I do not agree. In its latest report the European Anti-Fraud Office estimates fraud levels of 0.06 per cent. in agricultural spending, 0.41 per cent. in structural fund spending and 0.03 per cent. in pre-accession spending. That is not to say that there should be any complacency on these matters, or that the European Court of Auditors has not shone a light on aspects that could be much better. There is an argument about accounting standards and ensuring that they are very strong. It is quite another thing to say that the European Commission or the European UnionI do not recall which the hon. Gentleman saidis a fraudulent and corrupt organisation. That is a very large statement with which I do not agree, and with which I do not believe his party agrees.
	The decision retains the correction mechanism in favour of the UK, the abatement, along with the reduced financing of the correction benefiting Germany, Austria, Sweden and Netherlands. After a phasing-in period between 2009 and 2011, the UK will participate fully in the financing of the costs of enlargement by disapplying all non-agricultural expendituremoney in support of economic developmentin the new member states from the abatement. Finally, the additional UK contribution resulting from the reduction in allocated expenditure is limited to 10.5 billion, in 2004 prices, over the period from 2007 to 2013.
	In summary, the UK's abatement remains intact on all agricultural spending. On all expenditure in the EU15 it is preserved and will rise in value. Along with the fact that the ceilings on budget expenditure are retained, and that the budget overall will fall to less than 1 per cent. of EU GNI during this budget period, we argue that that makes it a good deal for the taxpayer. At the same time we will, along with other net contributors to the EC budget, pay our fair share of the costs of enlargement. We support enlargement, which we know will be good for Britain, creating new trading opportunities and new jobs.
	I believe that I have answered in full the interventions made in the course of this stand part debate. We have an obligation to honour our commitments made to our European partners. By adopting the own resources decision this evening, we will take Britain's relationship in Europe to a new level that will open up new opportunities for British business.

Philip Hammond: It was not my original intention to speak, at least in any substantial way, in the debate on clause 1 stand part. The Opposition are placed in some difficulty by the structure of the Bill. It has only one substantive clause, which contains only four substantive words. They are and 7th June 2007. I took the view, for better or for worse, that seeking to amend clause 1 was tantamount to voting against the Bill on Third Reading. Indeed, that is what we shall do, if our attempt to amend the Bill through the insertion of new clause 1, which I hope we will have an opportunity to debate later, is unsuccessful.
	However, as the Chief Secretary has set out his argument at some length, it is necessary for me to speak briefly to answer some of the points that he raised, in the hope that I will be able to make my substantive contribution to the debate about the Bill in the debate on new clause 1, which I hope we will come to in due course.
	The Chief Secretary must recognise that the original position with which his Government went into the negotiations was that the rebate was fully justified and non-negotiable. Both on Second Reading and again this afternoon, he sought to rewrite history to imply that it was always recognised and understood that part of the deal for enlargement would be that the UK had to give away part of its rebate.
	However, that is simply not the case. The main enlargement of the European Union was agreed in April 2003 and implemented in January 2004; Bulgaria and Romania signed the treaties of accession in April 2005. By summer 2005, when the then Prime Minister told us that the rebate was not negotiable, period and the current Prime Minister told us that the rebate was fully justified and non-negotiable, enlargement was a fait accompli. The Chief Secretary's Government never envisaged giving away part of the rebate as part of the negotiation for enlargementor does the Chief Secretary want to tell us that both the former and the present Prime Minister wantonly misled the House when they made those remarks?
	A former occupant of the Chief Secretary's office told the House of Commons:
	we will benefit from abatement on any new expenditure incurred as a consequence of both enlargement and the ceilings in the existing EU 15...the United Kingdom will benefit very considerably from the application of the abatement to any new expenditure on enlargement.[ Official Report, 3 July 2001; Vol. 371, c. 145.]
	In 2005, it was never the Government's position that the rebate had to be surrendered or even negotiated as the price of enlargement. To say so is simply wrong. The Government supported EU enlargement; after it was secured, they went in to negotiate the own resources decision on the basis that the rebate was not up for grabs.

Bernard Jenkin: My hon. Friend has made his point most eloquently. Will he go on to explain why the rebate is necessary? It is not necessary just because of the imbalance of agricultural expenditure throughout the European Union, but because we trade a disproportionately high share of GDP. We import many products that are instantly exported to the European Union. They attract tariff duties that become payable to the European Union, and we suffer as a consequence. As trade has grown, has not the case for the rebate continued to grow?

Philip Hammond: I am grateful to my hon. Friend, who has saved me the trouble of setting out the case for the UK rebate. We had a wonderful cross-party consensus. We Conservatives believe that the UK rebate is fully justified and non-negotiable; on 25 May 2005, the then Prime Minister told us that the UK rebate was fully justified and non-negotiable. One would think in the ordinary course of events that there would not be a difficulty. Unfortunately, however, things did not turn out that way.
	In summer 2005, the Government's position was exactly the one that the hon. Member for Wolverhampton, South-West (Rob Marris) told us a few minutes ago would be completely untenable. The Government supported the enlargement of the European Unionindeed, they were a passionate advocate of such enlargementbut, to use the former Prime Minister's words, they believed that the UK rebate was fully justified and non-negotiable. As we try to have a sensible discussion this afternoon, I hope that we will hear no more nonsense about the change to the rebate being an inevitable part of a deal to secure enlargement. Indeed, I suggest that the only enlargement at stake in Brussels in December 2005 was that of the former Prime Minister's income and ego, if he is in future appointed President of the European Union, as some have suggested.
	The position changed during the course of 2005, following the summer, when the then Prime Minister and then Chancellor were so robust in their defence of the rebate. The Government moved their position and said that they would consider a concession on the rebate, but only in the context of meaningful and significant reform of the EU budgetparticularly of the common agricultural policy. The then Prime Minister said that if we got rid of the CAP and changed the reason why the rebate was there, the case for the rebate would change. I do not think that any Conservative Member would disagree with that. For that reason, the principal thrust of our argument this evening will be to try to improve the Bill and put some backbone back into the Government's negotiating position through the insertion of new clause 1. I shall not go into the detail of that now, Mrs. Heal, as you would not welcome it.

Rob Marris: I thank the hon. Gentleman for his usual generosity in giving way, which I have experienced many times before. Does he believe that the European Union could have enlarged to 27 member states, as it has, without a financial cost to the United Kingdom?

Philip Hammond: The hon. Gentleman will know that if the Bill is passed tonight and the own resources decision is ratified, there will be an increased cost to the United Kingdom; the United Kingdom's contribution will increase as a result of enlargement. So the answer to the question is no: I do not believe that enlargement would have been possible without an increase in costs to the United Kingdom, and that increase will be borne. However, the Government are asking us to bear a larger increase in costs than would otherwise have been the case, because of the sacrifice of the rebate. I put the question back to the hon. Gentleman: what was the then Prime Minister doing going into the December 2005 negotiations supporting enlargement but with the position that the rebate was non-negotiable, or, as it later transpired, negotiable only in exchange for significant changes to the EU budget?

Rob Marris: rose

Philip Hammond: I shall be fascinated to hear the answer to that question.

Rob Marris: I do not know much about the hon. Gentleman's former working life, although he knows a bit about mine. I have spent many hours of my working life in negotiations. In negotiations, people start with a position, and sometimes with a reserve position. Sometimes, in life, politics or commercial negotiationsI was doing the latterpeople learn something and their position changes. That is the benefit of public political debate, and of having commercial negotiations face to face, in spite of video-conferencing.
	I have not spoken to the former Prime Minister about the issue, but I would have thought that he learned things and changed his position during the negotiations. That is an honourable and reasonable thing to do. If one is not prepared to do that, one is in a strange position as a politician. We constantly say that we want democracy in public debate, but we cannot have that unless people are prepared to consider changing their positions.

Philip Hammond: That was an exercise in the rewriting of history that Stalin would have been proud of. The facts are these: the Government run by the hon. Gentleman's party supported the enlargement of the European Union, and in summer 2005 clearly told the House of Commons that enlargement was perfectly compatible with the position that the British rebate was fully justified and non-negotiable. His Government hung to that position until they decided that they would negotiate the rebate, but only in exchange for meaningful and significant reform of the common agricultural policy. That was a radical change of position, but none the less we accepted it as a sensible way to proceed, provided that meaningful reform of the EU budget was really on the table.
	On Second Reading, the Chief Secretary claimed that the Brussels decision in December 2005 paved the way for a critical look at how to reshape the EU budget. In reality, the Government came back with only a vague commitment to a review under the French presidency. Later, we shall argue the case for new clause 1, to remedy that hopeless negotiating position.
	Let us be clear. The Chief Secretary says that failure to pass the BillI take it that by extension, that means to pass it with this clause incorporated in itwill create a political crisis in the EU. This has nothing to do with being pro-EU or anti-EU. We do not call it anti-EU when the French Government fight their corner hard in the interests of their taxpayers and citizens. Our new clause addresses the expectation that the UK Government, like all other EU Governments, will fight for the best interests of their citizens and taxpayers within the system. As has so often been the case in their dealings with the EU, this Labour Government have failed to fight for the interests of the UK taxpayer.
	The Chief Secretary must recognise how the EU works. It is not anti-European to fight the corner of national interest. The other EU countries do it. That is what sovereign states do in a grown-up relationship, whether negotiating with our European partners or with the US; it is how an elected Government should conduct themselves.

Andy Burnham: Will the hon. Gentleman dismount from his high horse for a moment and tell us whether he considers that the 22 per cent. increase in the EU budget negotiated by the Major Cabinet secured what he is now telling us that he would always do? Was that a good dealthe right deal for Britain at the time?

Philip Hammond: I remind the Chief Secretary that it was a Conservative Government who achieved the UK rebate in the first place, after years of valiant battle, and it is his Government who are proposing to give it away for absolutely nothing.
	This is not how we expect our Government to behave. We expect them to participate constructively in organisations such as the European Union, but also to fight our corner. Why do we have to listen to Labour Ministers telling us that anybody who wants to fight the UK's corner is anti-European and trying to provoke a crisis in the EU? Does the Chief Secretary think that they have such debates in France, Germany or Italy when those Governments defend their corners and fight vigorously for the interests of their taxpayers?

Andy Burnham: Does the hon. Gentleman agree with the statement made by the hon. Member for Shipley (Philip Davies) less than 10 minutes ago that the European CommissionI think that that is what he was talking aboutis a corrupt and fraudulent organisation?

Philip Hammond: We do not have to take a view on that; we can look at what the Court of Auditors has said about corruption and fraud, misappropriation of the budget and misuse of EU funds. However, we are debating the UK rebate.
	Let me remind the Chief Secretary that after the so-called negotiations in December 2005, perhaps the most damning comment on the performance of the British Government was made by the French Foreign Minister, Mr. Douste-Blazy, who praised Tony Blair as willing to wage a battle for the EU
	rather than calmly doing his job simply as a British prime minister.
	What an accolade that is for a British Prime Minister from a French Foreign Minister after an EU negotiation! The British people would rather their Prime Minister calmly did the job to which he was elected. With the economy slowing, Government borrowing mounting, public services under pressure, staged pay rises and a dramatic slowdown in funding growth, the British people would rather their Prime Minister fought any proposal to hand over yet more money to the EUcertainly any proposal to do so on an unconditional basis.

John Redwood: Has my hon. Friend noticed that the Chief Secretary clearly does not understand numbers, as he says that John Major's settlement, which was a lot lower than his, was too high, but that his, which is a lot higher than John Major's, is just about right? Is not that exactly the kind of arithmetic that has got us into the Northern Rock hole?

Philip Hammond: It is rather disconcerting if the Chief Secretary to the Treasury cannot add up, but we have learned to live with that kind of impediment.

Rob Marris: I can see where the hon. Gentleman is going, and I think that I understand his position, although he will elucidate further as he goes on. He appears to be suggestinghe will correct me if I misunderstand himthat the interests of the United Kingdom would always be in opposition to the interests of the European Union. I would caution him by suggesting that that is often not the case.

Philip Hammond: The hon. Gentleman has fabricated that. I did not say that at all. This is how I would like to see things working: the UK Government, when they go in to these European negotiations, being as self-confident in that forum as the French Government or the German Government, and not always afraid that any defence of British interests will be characterised as being anti-EU or anti-enlargement. Why cannot we simply have a sensible debate that says, We know that we want the EU to enlarge and that we want to embrace the countries of eastern Europe, which is in our interests, but we want to have the most robust discussion about and defence of British national interests when it comes to carving up the cost of dealing with that?

Si�n Simon: Surely the hon. Gentleman can hear himself saying, Can we have a sensible debate which says that we want enlargement but we don't want to pay for it? That is not a sensible debate.

Philip Hammond: If the hon. Gentleman had been here earlier

Si�n Simon: I was.  [ Interruption. ]

Sylvia Heal: Order.

Philip Hammond: If the hon. Gentleman had been here earlier [ Interruption. ]

Si�n Simon: On a point of order, Mrs. Heal. Is it in order for the hon. Gentleman to keep saying, If the hon. Gentleman had been here earlier, when I was here earlier?

The First Deputy Chairman: I think that the hon. Member for Birmingham, Erdington (Mr. Simon) has made his point.

Philip Hammond: Let me rephrase my comment. If the hon. Gentleman had heard my earlier remark, he would know that the problem for him is that that was precisely the position of his party's Prime Minister in May 2005passionately pro-EU, passionately pro-enlargement, and telling the House of Commons that the British rebate was fully justified and non-negotiable.

Rob Marris: rose

Philip Hammond: I am going to make a little progress.  [ Interruption. ] Well, as the hon. Gentleman took the trouble earlier to say how generous I was in accepting his interventions, I have decided to disabuse him of that notion and make a little progress. After all, I told the House that I had not intended to speak on this clause.
	On Second Reading, the Chief Secretary said:
	On this side of the House, we are pro-European, but we are not uncritical and we are hard-headed. We are prepared to stand up for Britain's national interest. We do not posture or grandstand. We will get the reform that Europe needs.[ Official Report, 19 November 2007; Vol. 467, c. 995.]
	The truth is that, after all the posturing and grandstanding, and all that sabre-rattling about non-negotiable rebates, the Government simply did not negotiate hard enough; they were not hard-headed enough. We hope later today to give back to the Government some of the negotiating leverage that they so carelessly threw away.
	As we enter 2008 with a slowing economy and a very difficult fiscal picture, with climbing borrowing that must sooner or later be repaid, inflationary pressures getting stronger and the squeeze on public service financing mounting, does the Chief Secretary accept that the priorities of the British people are to address those problems here at home, not to throw billions of extra pounds of our hard-earned rebate, which the Prime Minister told us was fully justified, into the EU's pot?
	This evening will be our last opportunity to secure fundamental reform of the European Union budget. As the British rebate is eroded, our leverage becomes less and lessand that leverage to secure reform is in the UK's interest and in the interest of some of the poorest countries in the world. Indeed, the Prime Minister told us that if we were to make poverty history, we needed to make the excesses of the common agricultural policy history. Our partners in Europe may think that they have put one over on Tony Blair, but we need to send a message to them that this Parliament is made of sterner stuff.
	It would be possible for us to vote against clause 1 stand part, but given the nature of the Bill, we would like to argue the case for new clause 1 in due course, in the hope that it will make the Bill acceptable as a way forward. If we fail to succeed in our argument for new clause 1, I shall ask my right hon. and hon. Friends to vote against the Bill on Third Reading. I say that because voting against clause 1 stand part at this point would essentially have the same effect as voting against the Bill on Third Reading. Therefore, I do not intend to divide the House on clause 1 stand part.

Austin Mitchell: I have a dreadful feeling that this discussion, which should be about value for money and whether we are paying over the odds to belong to the European Union, is degenerating into the old pro or anti-Europe argument, with those who are enthusiastic about Europe saying, Pay upgive 'em the money, Barney!, while those who are more critical and sceptical, such as my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), say that this is a bad deal. And it is a bad deal.
	The meat of the discussion is in clause 1. That is the meat of the Bill, unless we are going to fight over the short title, which would seem a rather pointless exercise. It is important to recognise that the meat of this debate on the calculation of the European correction is the generosity shown towards Europe by our previous Prime Minister, who seems to have ended his period in office with extraordinarily generous impulses towards Europe, one of which was detailed in the newspapers this morning: a commitment to provide 60 per cent. of energy generation through renewables in accord with European totals. It is a total that we cannot reach, and it is going to be incredibly expensive even to move towards reaching it, but he committed himself to it.
	That is irrelevant to this Bill, as I am sure that you are about to tell me, Mrs. Heal, but what is relevant is his generosity over the rebate. Until that point, we had been told that it was inviolate and sacred, and that it would be there for ever to recognise Britain's unique situation and contribution, but suddenly it was breached. The interesting question for me is what made our previous Prime Minister so generous on his long march to the Union pour un Mouvement Populaire, fighting against the Socialist candidates in the municipal elections. Was that breach agreed by the Cabinet before the Prime Minister negotiated it? Did the Cabinet authorise the Prime Minister to make that concession? Was it told about it later, or did it authorise it before the negotiations started? We need to know that, and we also need to know what the cost will be.
	I was delighted to hear the Chief Secretary say that the figures will be published. I hope that they will be published annually, because the British people need to know what they are contributing towards Europe and what this institution is costing them. We are told that the money is to pay for enlargement. We already pay over the odds to belong to the club in the first place. There have been certain disagreements about the scale of the figures, but those I have had calculated for me show that we are now paying 10 billion a year grossnot eurosand 4 billion a year net. Money comes back to us for projects approved and supported by the EU that we would not necessarily want in the first place, but we do get a return. By 2013, under clause 1, we will be paying 20 billion a year gross under clause 1, and 6 billion a year net.
	We are talking about billions here, and an increased contribution of up to 3 billion chucked in just like that. We are fighting the police for a measly 30 million, but we are giving away, on this generous impulse of our previous Prime Minister, up to 3 billion by 2013. My right hon. Friend the Chief Secretary told us that that was for enlargement, and part of it is, but it is also for a lot of other purposes decided by the European Community and not by us. It is only partially for enlargement in any case. If we accept this breach in the rebate, to which we agreed to sustain the enlargement of the European Community that we wantwider, not deeperare we preparing to say, when the enlargement includes Turkey, that we must agree to another reduction and carving of the rebate? I do not want to say that, and we should not be committed to saying it.
	It is a question of money. I think that my figures are accurate, but I hope that the figures will be published annually so that people know what the Bill means to this country, and so that they know how much they as taxpayers are paying to sustain membership of this institution. It is not our only contribution, of course; we are paying 1.8 billion for other programmes. The Organisation for Economic Co-operation and Development calculates that we pay 15 billion to belong to the common agricultural policya policy that at every election every party has said will be fundamentally reformed, but it never has been. That policy was to be reformed fundamentally as a condition of our agreeing to the reduction of the rebate, but it cannot be reformed until 2013 in any case, when I have no doubt it will be sustained.
	Those are the sorts of contributions we make, and if we add the cost of regulations, we find that membership of this institution costs us about 40 billion to 50 billion a year. I would like those calculations to be made public every year so that we know what is going on, and what we are paying. I would also like them to be calculated in terms of the effect on GDP. The contribution is going to be about 0.5 per cent. of GDP. We are struggling as a party to get an increase in GDP up from a measly 2.5 per cent. This year it will be substantially lower than 2 per cent. but we are accepting an increase in the 0.5 per cent. of GDP contribution we pay to belong to the EU. We need to know the figures because any loss to GDP is cumulative; it goes up all the time. The payment is also a payment across the exchanges. I know that the previous Prime Minister is making a magnificent effort to close the balance of payments through his earnings in the United States, but that will not be enough to deal with the fact that the deficit is now running at about 5 per cent. of GDP. We are adding to it through this increase in the contributions set out in the Bill.
	The question we face tonight is one of whether the increase is worth the money. Should we support this increase in contributions to the EU? The new clause proposed by the Conservatives, which we shall discuss later, is worthy and well worth accepting. At this stage, I can say only that we are not getting value for money, and that the contribution is not worth making. We are paying over the odds to belong to a club that is doing serious damage to us anyway, and we should not agree to this contribution. I certainly cannot vote for it.

Vincent Cable: Like the hon. Member for Runnymede and Weybridge (Mr. Hammond), I had not intended to speak in the stand part debate and was waiting for the interesting discussion of the new clause. However, unlike him, I do not intend to spend 25 minutes saying what I had not otherwise thought it necessary to say.
	I shall make a few brief comments on our position. I was provoked by the Financial Secretary, who came in with all guns blazing, telling us that it was make-up-your-mind time. The implication of his remarks was that anybody who wanted to exercise parliamentary scrutiny or was critical of the budget settlement was somehow anti-Europe or anti-enlargement. That is clearly wrong. Liberal Democrats are greatly in favour of the European project, greater participation and enlargement. However, we believe that the settlement that the Government reached is not good and we do not understand why we should vote for it.
	I do not agree with many of the things that the hon. Member for Glasgow, South-West (Mr. Davidson) says about the European Union, but he succinctly summarised the issue in an intervention. It is possible to believe that enlargement is necessary, desirable and in the British interest, and that economic and financial consequences are necessary, which means accepting that countries should not continue to support the UK, yet be critical of other aspects of the European budget settlement.
	The key point, to which we shall revert when we debate the new clause, is that the previous Prime Minister either did not perceive or would not act on the link between the British rebate and future negotiations on the agricultural budget. The reason for that is a mystery. Doubtless, historians will tell us why he was unable to use that link and that leverage. Not only those on Opposition Benches but the current Prime Minister was unhappy about the previous Prime Minister's actions. Leaks from the Treasury made it clear that the current Prime Minister was furious that proper, tough financial negotiation was not taking place. It is important to stress that.
	We will ascertain shortly whether new clause 1 makes it technically possible to retrieve the position. I do not knowI have an open mind and I will listen to the debate. I simply wanted to intervene now to make it clear that being pro-Europe and in favour of enlargement and of Britain's adjusting its contribution to take account of that does not mean that we support the Bill and the settlement. It was a bad deal and, unless something happens during the debate on the new clause, we will vote against it.

Ian Davidson: I welcome the Chief Secretary's willingness to take so many interventions because that allowed us to hear more about the Government's position. I was concerned about his saying at the beginning of the debate that, if we did not accept the proposals, it would lead to a complete breakdown of our relationship with Europe. If, every time Ministers go off on our behalf to discuss matters in Europe and come back with a deal that is presented to Parliament for a decision, we cannot reject it because it would result in a complete breakdown of our relationship, we have effectively no parliamentary scrutiny and Ministers are self-employed. We should not accept such a line for a moment.
	The fact that the previous Prime Minister agreed the settlement does not necessarily bind us for all time. Had I known that he had aspirations to be president of Europe on his way to being president of the world, I would have believed that agreeing the settlement represented an inappropriate conflict of interest and that he should not have been allowed to go on his own.
	I agree with the hon. Member for Twickenham (Dr. Cable) when he agreed with menot an unreasonable positionthat it is possible to be in favour of enlargement but unwilling to accept other elements of the budget, such as the common agricultural policy with its obscene overspending and all the waste and extravagance. Let us take the monthly commute between Brussels and Strasbourg, with all the boxes in the lorries and so on. We do not have to accept that as the price of enlargement. We could have enlargement without the continuation of those elements. The Government's inability to negotiate them away is a cause for condemnation.
	The Government defended their position by saying that, if they had left matters to the Commission, they would have been worse. That is probably true. However, I do not know whether the Chief Secretary or his advisers have ever been negotiators, but I suspect that the Commission was adopting the old stance of trying for 10 per cent. and being prepared to settle for 5 per cent. The Commission's asking for more money and the Government's beating it down a bit is not an enormous cause for self-congratulation. The Commission made a bid for more moneythat is what commissions do. Of course, the Commission wants more moneyit is a self-aggrandising organisation. The fact that it is spendthrift and extravagant does not mean that we must accept everything it proposes.
	The Chief Secretary tells us that the Government made the best possible deal. Oh no they didn't. Of course, a better deal was possible. We tend to get movement from the European Union only in times of crisis and difficulty. Rejecting the budget and showing that we are not prepared to accept what the Government have accepted is for the Government's own good. Everything that I propose to the Government is for their own good, even if they do not always recognise it at the time.
	Ministerial positions would be enormously strengthened if the budget were rejected, because Ministers could negotiate much more strongly next time. I wonder what sort of advice the Chief Secretary has been getting from the Foreign Office and elsewhere. Foreign Office officials are so insecure that they are seen outside the building only in groups of eight because they are unwilling to travel anywhere on their own. In those circumstances, we must tell the Chief Secretary, You've done reasonably well, but not well enough. We ought to send
	him homeward
	Tae think again.

Rob Marris: My hon. Friend says that a better deal was possible. I agree with the intellectual construct, just as I believe that it is possible for my hon. Friend to become leader of the Labour party. However, I think it unlikely that my hon. Friend will become leader of the Labour party and, outside the Chamber I will, if he wishes, adduce some evidence to that effect. He says that a better deal was possible; will he adduce some evidence to that effect?

Ian Davidson: My hon. Friend deserves some credit for being hyperactive in defence of the Chief Secretary. It is noticeable that the Chief Secretary has more officials than Members supporting him. Only one Member and a part-time Member support himthat shows the support that he enjoys on the Labour Benches. The enthusiasm for the proposals among Labour Members is not highthey will vote for them simply out of loyalty to the Government. The vast majority recognise that it is a poor deal.
	Britain clearly went into the negotiations with the slogan, We surrender and progressed from there. Britain's essential core position was to get an agreement. It was not willing to countenance circumstances in which it would stand out against the majority.

Rob Marris: What is the evidence?

Ian Davidson: The evidence is in the reports that we have read. I am sure that my hon. Friend accepts that it is always difficult to prove a negative. Let us consider the French position. The French have always been much more resolute in standing up for the French position than the United Kingdom has been in defending the UK position.

Andy Burnham: My hon. Friend compares what the UK Government did in the negotiations with the French Government's actions. Does he accept that French net contributions will grow significantly more quickly during the current financial perspective than those of the UK?

Ian Davidson: Yes, I do accept that France's net contribution will grow more quickly than the UK's, but I also accept that France's net contribution per head is less than the UK's. Furthermore, I am aware that France is the largest recipient of EU largesse, albeit not in terms of the balance between incomings and outgoings, but in terms of the amount that it receives. We should also recognise that EU funding is a transfer of money to particular groups from particular groups. One of the reasons I am so hostile to the way in which the EU budget is currently constructed is that the money comes from people in my constituency, who pay higher food prices than they would otherwise, and goes to wealthy farmers who neither need nor deserve it. The deal that we are discussing does nothing to address that. That is why I intend to vote against it.

Andy Burnham: Again, however, would my hon. Friend not accept that spending on the common agricultural policy will fall as a percentage of the overall cake during this financial perspective?

Ian Davidson: I return to my original point: the deal is not nearly as bad as it could have been, but it is not as good as it should be. I did not join the Labour party to settle for second best. I wanted to see the best that was possible, both for my people and for the area that I represent. I do not believe that what we have been offered is a good deal: rejecting it is the way to a better deal, which is why I intend to do so.

John Redwood: I shall keep my remarks brief, because once again the Government are not allowing us proper time to deal with the matters before usclause 1 and the very important new clause 1, which we hope will be moved shortly. However, I cannot let the Chief Secretary get away with the disgraceful arguments that he has produced this evening.
	The Chief Secretary first suggested that Mrs. Thatcher used to negotiate and reach compromises, and that that was entirely comparable to the negotiation, sell-out and giveaway that he has again announced to the House. Let us compare the two negotiations. Mrs. Thatcher went to a Community in which the other 11 countries had no interest in letting us keep more of our money. Any one of them could have vetoed her proposal that we should have a rebate. She managed to talk them round from 11-one down to 12-nil in favour, because she had to win by a unanimous vote.
	All that the current Government had to do when they went to Brussels was say, We have a veto and we are not going to give away what Margaret Thatcher so wisely and brilliantly won for the United Kingdom, but they could not even do that. They gave in under pressure and said, Oh deary me, no, it would be quite wrong of us to use our veto. We'd love to shell out 10.5 billion over the first period and much more over subsequent periods, because we now realise that we shouldn't use the veto and we're here to give in. The Opposition are delighted that the Chief Secretary gave way so much in this debate, but we are unhappy that Mr. Blair and others gave way so much when they completely mishandled the negotiations.
	Labour colleagues of the Chief Secretary are present who believe that the sterling equivalent of that 10.5 billion would be much better spent on public services, which they greatly revere. There are also those on the Conservative Benches, such as me, who believe that, in the light of all the money wasted in public services, that 10.5 billion should be given back to British taxpayers, who have paid all too dearly for the Government's inefficiency and their bad negotiations in Europe.
	The Chief Secretary tells us that we should regard the deal as a negotiating triumph, because although the Government gave away the veto that had been so brilliantly negotiated by a predecessor Prime Minister, they achieved a smaller rate of increase in the budget than the Chief Secretary apparently thinks we achieved 13 years ago. It may be that the Government achieved a smaller rate of increase, but what matters is that the budget increased so much in the early Labour years, after the end of the Tory years, that any increase would be unacceptable. The Chief Secretary cannot get away from the fact that the budget that he is recommending is massively higher than that which was recommended by Mr. Major. For that reason alone I cannot accept it, because it is too big a burden on British taxpayers.
	We then heard the myth, which the Government put about, that the proposal is essential for those countries in eastern Europe, which would otherwise be deprived. As my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond) pointed out, however, enlargement was agreed without the new variant. If we had dug in and used our veto, enlargement would still have happened, but we would not have had to make a disproportionately large contribution to that increased spending in the territories entering through enlargement. Some of the other rich countries of western Europe should also have continued to make a bigger contribution relative to ours, for the reasons that my hon. Friends have already set out.

John Hayes: I hope that my right hon. Friend will not ignore the Chief Secretary's other two specious arguments. The first was that the deal could have been worse if the Commission had had its waya suggestion that represents the last resort of the scoundrel. The other was that any objection to what has been negotiated is somehow improper and that the House should not scrutinise the deal that was done. That is the Vichy argument, which has been used by malevolent or misguided Ministers for years in selling this country short.

John Redwood: I am grateful for those extra points. I should like to make some additional ones, to finalise my critique of the Chief Secretary's position.
	The Chief Secretary implied that eastern European countries would be short-changed. That is not true. He also assumed that all the EU spending in those countries will be worth while, but as we know, much of it has been shown to be inefficient, wasteful or even fraudulent by the accounts or by the auditors' assessment of them. I fear that there will be more such instances in future years. I am sure that the Chief Secretary will be unable to say now that there will be no more such practices, so we may find ourselves financing more unsatisfactory, unnecessary, inefficient or even fraudulent programmes, which my electors are decreasingly in favour of doing.
	Finally, the Chief Secretary said that we must understand that we will get more trade for British companies out of enlargement and the greater prosperity of eastern European countries. Of course we will, but that is not contingent on giving away our veto and our budget position. Indeed, I would argue that the main reasons for getting more trade from those countries will apply to non-EU members as well as to EU members. Those reasons are the free trade in the world as a whole, through the general agreement on tariffs and trade, and the fact that some of those eastern European states have wisely decided to set much lower tax rates and create a much more favourable climate for enterprise than this Government are creating for the British companies that have to compete with them.
	The Chief Secretary should not suggest that what was negotiated is a great triumph. It was a disgraceful sell-out, and in contrast to the excellent negotiations that my party carried forward when we first won the rebate, it marked an extremely sad day for Britain. Voters of all kinds will know that that goes along with the money wasted on Northern Rock, ID cards and all the other things, as a symbol of what is wrong with this Government.

Andy Burnham: I shall do my best to respond to some of the points that have been raised, and I shall do so briefly, because there is a desire in the Committee to move on to new clause 1, and I do not want to detain it too long.
	I assure the hon. Member for South Holland and The Deepings (Mr. Hayes) that my motivations for putting forward the arguments that I have made do not include malevolence. Nor was it my intention to appear arrogant at the start of the debate, if that is how hon. Members interpreted my contribution. In introducing the discussion, I was simply pointing out that it is not possible to go back and ask for small changes here and there, and for a different own resources decision. Essentially, my point was that there should be proper parliamentary scrutiny of the Government's actions. However, the way in which business is done is that the Government negotiate on behalf of the country, and the House has the opportunity to accept or reject what they have negotiated. That is the opportunity that hon. Members have this evening, and rightly so. I was simply saying at the beginning that we are not engaged in line-by-line considerations, but deciding whether to give an in-principle endorsement of the deal before us.
	My hon. Friend the Member for Great Grimsby (Mr. Mitchell), who is no longer in his place, asked whether the deal was worth the money. I think that he was really asking about our membership of the European Union in overall terms. The tenor of some of the contributions to this debate was that the EU is a one-way streetthat the money goes in and nothing comes back the other way. However, it is important to see how this country's trade with the EU has increased significantly over recent years. That trade now accounts for 56 per cent. of British trade, and it accounted for 63 per cent. of British goods exports in 2006, totalling 150 billion. I could go through a whole range of examples showing that our economy and jobs benefit from this country's membership of the European Union.
	I shall go directly to the question of enlargement, as it is a key theme of our proceedings this evening. Each enlargement of the EU has seen prosperity grow further. When Spain joined, and when Sweden joined, we saw our exports to those countries increase by about a quarter. As a result of such accessions, we have seen direct benefits to British business, British jobs and the British economy. Since the accession of the A8 countries, we have also seen a major increase in UK exports to those countries, totalling some 6.4 billion in 2005, which is up 151 per cent. This process benefits the British economy.

Rob Marris: This is not only a question of the financial benefits, which are debated and sometimes disputed. I would expect general agreement in the House that the enlargement of the European Union has deepened democracy in countries such as Portugal and Spain, which have emerged from under the yoke of fascism, and in eastern Europe, which has recently emerged from under the yoke of Stalinist communism. That is good not only for the people who live in those countries but for the people of the United Kingdom.

Andy Burnham: I entirely agree. The benefits of the decision that the European Union has taken on helping those economies to grow will have real dividends for this country for many decades to come, following this debate.
	I want to respond to a couple of the other points that were raised in the debate. The right hon. Member for Wokingham (Mr. Redwood) made a few rather cruel sideswipes about my financial acumen that I felt were a tad unjust. He questioned whether I had understood the maths relating to a 22 per cent. increase in the overall European budget in 1994. I assure him that I can understand that the budget was significantly smaller when that decision was taken. I accept that; I understand it. Let us put that point beyond doubt and on the record.
	The right hon. Gentleman watches and questions public spending in great detail. I read his blog, and I see what he says. Would he ever feel comfortable with a 22 per cent. increase in any public sector budget? That is not the sort of thing that he would normally advocate. My maths are pretty okay, actually, and I want to ask him whether he can recall whether Britain's net contributions in that period went up by a similar order. Was there not a significant increase, albeit on a smaller base, for Britain? Was not there a significant percentage increase in Britain's net contributions?  [ Interruption. ] He says that he does not know. Perhaps I can help him.
	The percentage increase in our contributions from 1994 to 1999 was an increase in gross costs to the UK ofwait for it73.4 per cent. There is a bit of a difference, really. Okay, they were different times, and it was a smaller European Union and a smaller budget, but let us get some facts on the record. Let us have some long memories in this debate, rather than a few short ones.

Peter Lilley: On the question of putting facts on the record, the right hon. Gentleman's Government have already put it on record that the net contribution of the UK as a percentage of its own total managed expenditure is set to rise from 0.64 per cent. to 0.96 per cent. by 2010. That is a 50 per cent. increase in the share of our expenditure that is going to Europe. If he has got a grip on these matters, why is he not keeping that amount down, rather than putting it up?

Andy Burnham: I have referred to these figures before in the debate. The net contribution is published in the pre-Budget report and again in the Budget, and that is a forecast of payments that the country will make. The figures have been set out quite clearly. I do not have the pre-Budget report to hand, but from memory I think that the net contributions over the course of the spending review that we are about to enter are about 5.5 billion, and will stay at roughly that level over the spending period.
	My hon. Friend the Member for Glasgow, South-West (Mr. Davidson), who has also left the Chamber, made the point that we had done reasonably well but not well enough. I accept much of what he said. It is his right as a Member of the House to believe that this is not a good enough deal for this country. That is his prerogative. I would say, however, that if we consider all the elements of the deal, we see that it does the job.
	What are those elements? They include a rebate that will rise rather than fall during this financial perspective. That sounds pretty good to me. That is within the context of an overall budget that is significantly lower than was originally proposed. The amount spent on the common agricultural policy over the period will fall in value from 55 billion to 51 billion in 2004 prices. The British and French net contributions will come into rough parity in that period, which is an important step. As my hon. Friend the Member for Glasgow, South-West acknowledged, the net contributions that France will make will increase at a significantly faster rate in this financial perspective than they have done previously. Furthermore, we have secured a budget review, which the Commissioner has said will open up a consideration in which there will be no taboos. Everything will be up for consideration, and we shall be able to secure further progress as part of that review.
	The allegation from the hon. Member for Runnymede and Weybridge (Mr. Hammond) was that we had meekly accepted everything that was said and not pressed Britain's interests. As I have just illustrated, however, Britain has demonstrably secured changes that are in our national interest. All the points that I have just made demonstrate that. It is wrong to suggest, as the hon. Gentleman seemed to do, that we have simply accepted whatever was being put forward by Brussels or by other member states.

Rob Marris: My hon. Friend the Member for Glasgow, South-West (Mr. Davidson) asserted that a better deal was possible. When I asked him for evidence of that, he was unable to produce any. Similarly, neither were the Opposition. Bearing in mind the benefits of this deal, both in economic terms and in terms of the non-economic elements such as furthering democracy, is my right hon. Friend aware of any evidence that a better deal for the United Kingdom was possible, or that one would be possible if this measure were rejected tonight?

Andy Burnham: I am not. Throughout the debate, I have said that this was the best possible deal that we could secure. Opposition Members seem to be interpreting that as my saying that it is an ideal, perfect deal. That is not what I am saying. I am saying that we have had negotiations [ Interruption. ] The hon. Member for Runnymede and Weybridge is not listening, but I have set out the things that were secured in those negotiations that will benefit this country and that are demonstrably in our national interest. They include a rebate that is worth more to this country over the period, a shift in the amount in percentage terms that we spend on the CAP, and, more than that, reform within the CAP. There is a shift from pillar one to pillar two spending and a voluntary system whereby countries are encouraged to spend more on improving the sustainability of the rural economy rather than just provide subsidies of the sort which my hon. Friend the Member for Glasgow, South-West finds objectionable, so as to help to diversify the regional economy and help people to develop new business opportunities.
	All those things amount to progress. They are the product of good negotiations by a committed British Government who are in there fighting for Britain's interests. At many points in this debate, the argument has been, Let us reject the Bill tonight, as that will embolden and strengthen Ministers when you go back [Interruption.] I am paraphrasing a point that was put to me about strengthening our hand. It is for each party in the House to decide how it wants to conduct its relationship with our European partners. My argument is that going back now to ask for renegotiation would involve a lot of bad faith.

Rob Marris: It could be worse.

Andy Burnham: Indeed; it could be substantially worse. I believe that the best way to be heard and get constructive dialogue is not always to adopt a confrontational and knee-jerk response. As I have demonstrated, we have not given it all away.

John Hayes: The tragedy of the Minister's opening remarks failed to impress, so he is now obviously trying comedy instead. Surely he would not have the House believe that the falling cost of the common agricultural policy is the result of these negotiations. The falling cost of CAP was predicted at the mid-term review five years ago and is a direct result of the move away from production-based subsidies. The savings now being made as a result of this deal are no greater than those predicted then.

Andy Burnham: As the hon. Gentleman knows, the reform of CAP did not begin with this own resources decision. These matters were debated at great length by the previous Government and subsequently by this Government. I acknowledge a long-running debate on the structure, shape and size of CAP; the point I was making is that there is CAP reform within this own resources decision. Let us be absolutely clear, however: we believe that a much more radical reform of CAP is necessary if Europe is to be ready to face the challenges of the years to come. That was why we wanted a no taboos full budget review, which is what we secured. That is the Government's position and it is our objective in that review to secure far-reaching CAP reform, which is what we will now argue for in the negotiations. In my view, that is the right way to conduct them.
	I hear the points made by colleagues this evening. It is a matter of judgment, but our judgment is that it is right to engage constructively and push the British case. In doing so, we are more likely to be heard. Members can see the evidence for that in the detail of the own resources decision.
	 Question put and agreed to.
	 Clause 1 ordered to stand part of the Bill.
	 Clause 2 ordered to stand part of the Bill.

New Clause 1
	  
	Commencement

'(1) This Act shall come into force on such day as the Treasury shall by order specify.
	(2) The day specified in the order made under subsection (1) shall not be earlier than fourteen days after the date on which the condition has been satisfied.
	(3) The condition referred to in subsection (2) is that the Treasury shall have laid before both Houses of Parliament a report on the review by the European Commission covering all aspects of EU spending, including the CAP, and of resources, including the UK rebate, as provided for at paragraph 80 of the Financial Perspective 2007-13 issued by the European Council in December 2005, including a certificate that the Treasury considers that the outcome of the review is satisfactory to the interests of the United Kingdom.'. [Mr. Philip Hammond.]
	 Brought up, and read the First time.

Philip Hammond: I beg to move, That the clause be read a Second time.
	I can see that the Minister, if he ever gets bored with what he is doing, has a whole new potential career ahead of himcoming in here on a Friday morning and giving the hon. Member for Hendon (Mr. Dismore) a break. I am extremely grateful to my right hon. and hon. Friends for the self-restraint that they displayed, ensuring that we are able to debate new clause 1. I shall seek to be very brief and not to rehearse any of the arguments made in the stand part debate.
	The new clause is genuinely designed to help the Government by re-injecting a bit of backbone into their negotiating position. It would delay the implementation of this change in the own resources decision until satisfactory completion of the promised review of the European Union. It makes explicit the conditionality that the Government claimed was the basis of their final negotiating position.
	In the course of the previous debate, the Chief Secretary said that nothing was agreed until everything was agreed. I would suggest, however, that if the new clause were incorporated into the Bill, nothing would be agreed until everything is done. It is about ensuring that what was promised to be done at Brussels in December 2005 is, indeed, delivered. We have already seen that the Government did not go into the negotiations on the basis of having to give away the rebate in order to secure enlargement. That is a spurious argument. What we have emerged with at the end of the negotiations is nothing but the promise of a review. We must now ensure that the promise of the review is turned into a reality.
	The Chief Secretary told us earlier that defeating the Bill or substantially amending it, as new clause 1 proposes, would create a political crisis in the EU. I see no reason why that should be the case. If everyone has acted in good faith, our EU partners will know that our Prime Minister gave away a large part of our rebate because he had secured a commitment to a fundamental reviewwith no red lines and no holds barredof the EU budget. Presumably, our partners entered into that commitment in good faith. There is no reason whatever why they should find it strange that this Parliament wants to ensure that that review indeed takes place, that it is meaningful and that its outcome is, at least as judged by the Treasury, satisfactory to the UK. This is not an anti-EU position, but a pro-British position. No other Government in the EU believe that there is a contradiction between being pro-EU and being pro their own national interests.

Si�n Simon: Will the hon. Gentleman cast his mind back to the protracted debates on the Maastricht treaty? If it is so easy to do and if the adverse consequences of our rejecting a European measure such as thisforcing the Government to go back to Europe and renegotiateare so negligible, why was the Major Government reduced to such shambolic performances night after night after night all those years ago?

Philip Hammond: I was not here then and nor was the hon. Gentleman. The answer is no, I will not cast my mind back; I will press on and make some progress instead.
	The outcome of the review is subject to individual veto by member states. Without something for us to offer our partners in the process of that review, Ministers, however well intentionedI am prepared to give them the benefit of the doubt on that, as I shall assume that they go into such negotiations well intentioned, if naivewill not achieve the UK's objectives.

Si�n Simon: On a point of order, Sir Michael. Will you please explain whether there is a level of patronising beyond which the hon. Gentleman ceases to become merely irritating and becomes unparliamentary?

Michael Lord: The way in which hon. Members address the Committee, provided that it is within the normal terms of reference, is entirely a matter for them.

Philip Hammond: Thank you, Sir Michael. In any case, if I have not reached that level yet, I will continue to practise.
	Ministers will not achieve the UK's objectives by giving away their bargaining chips as the price of admission to the game rather than trading them in the game itself. That is not generally regarded as good practice. This is all about the negotiating competence of the Government. The truth is that Labour walked away from the table at Brussels as good as empty-handed. The only thing that it brought back was the promise of a review, and unless we give some teeth to that promise and show that this Parliament will insist on its being delivered in good faith, it will have effectively come away with nothing. We must take the opportunity to restore the Government's negotiating position, because the British people would expect us to deal with their failures at Brussels in 2005.
	The new clause sets a test for the review having taken place, and for its conclusions being satisfactory to the United Kingdom Government of the day. That will restore some of the bargaining power that the Government have thrown away. The rebate concession was agreed on the back of a pledge; let us see that pledge delivered on in good faith. Let us test the Government's assertion that they have secured a genuine and far-reaching review of EU finances.
	The hurdle that we set was deliberately not set high. There is no objective test of whether the outcome of the review is in the United Kingdom's interest; the new clause simply requires the Government of the day to align themselves with the outcome as being
	satisfactory to the interests of the United Kingdom.
	We ask the Government to sign up to that outcome, and to say clearly and loudly to the British people, Yes, this is the outcome for which we gave away 7 billionand countingof Britain's budget rebate. If the Government do not believe that they will be able to do thatif they themselves have no confidence in the review, and no expectation of a satisfactory outcomewhat on earth were they doing trading the rebate for a review in the first place?
	The new clause would give Ministers a tool with which to bargain, to ensure that the review is meaningful and far-reaching and can lead to a genuine overhaul of the EU's finances rather than a whitewash. We are in a very different place economically from where we were in the summer and autumn of 2005. The economy faces many pressures, and many people who might have taken a much more cavalier attitude to the billions of pounds involved in 2005 will certainly take a different view today.
	If the new clause is carried and if the review is not concluded by the end of 2008incidentally, there is absolutely no reason why it should not be, given that the UK will now have an incentive to offer its partners to proceed with it speedilythe existing own resources decision will remain in force. The ceiling will not fall in, there will be no crisis, there will be no question of renegotiating the budget and the financial perspective or of cancelling enlargement. The position will be exactly as it is now, with the previous own resources decision implemented and continued. When the new own resources decision comes into effect as a result of the Treasury's certifying that it is satisfied with the outcome of the review, it will have effect retrospectively. Provided that the review is fair and open and the Treasury is able to certify that it considers the outcome satisfactory to the UK's interests, the own resources decision will be implemented in full in due course.

Andy Burnham: Has the hon. Gentleman made any inquiries of the European Commission about when the review is likely to be concluded, so that the process can then take place?

Philip Hammond: Paragraph 80 of the Council's decision at Brussels in December 2005 sets out parameters for a review that will take place in the financial year 2008-09, and unless there is slippage we expect it to be completed by the end of that financial year.
	As we make our decisions this evening, we must bear in mind that this really is the last chance not only to save the British rebate, but to maintain the leverage that will allow us to secure meaningful reform of the common agricultural policy in the future. If we can secure new clause 1, we will not be back in the place where Tony Blair and the Prime Minister promised us we would be in the summer of 2005, but we will be in a much better position than we would be in if the Bill were passed unamended this evening. We will also have sent a signal that Parliament intends to exercise effective and positive oversight of what our Government are negotiating on our behalf, and furthermore that Parliament intends to ensure that what is promised in those negotiations is delivered.
	The message that we need to send to our partners in Europe by agreeing to the new clause is that we in this Parliament respect Governments who, while being fully signed-up members of the EU, fight vigorously for their national interests. Britain intends to do the same from now on, and if our Government have not the backbone for the fight, this Parliament has.

Vincent Cable: I am rather tempted by the new clause. As I said in the clause stand part debate, there was a major failure in the negotiations to establish a link between the rebate and agricultural policy. It seems in principle, unless the Minister can persuade us to the contrary, that the new clause provides a mechanism for retrieving the situation.
	Let us look carefully at what the Prime Minister said about the review in his statement to the House in December last year, when he brought back the agreement. He clearly thought that he had extracted a major concession in return for the negotiations on the rebate. He said:
	Alongside this agreement on...the modernisation of eastern Europe, we also agreed on a fundamental review of all aspects of the EU budget, including the common agricultural policy...with the recommendation that it begin in 2008.
	The two subsequent sentences are crucial. The Prime Minister said:
	As the language in the European Council conclusions makes...clear, it is then possible for changes to be made to this budget structure in the course of this financing period.
	Of course it is possible, but why should the Governments who resist reform of the common agricultural policy agree? What possible incentive is there for them to do so? The French Government will almost certainly refuse to renegotiate. What possible leverage do the British Government have in carrying through the Barroso recommendations?
	The following sentence is even more substantial. The Prime Minister continued:
	This will also allow us to take account of any changes agreed in the World Trade Organisation round.[ Official Report, 19 December 2005; Vol. 440, c. 1564.]
	That is terribly important, because we keep being remindedrightlythat if the negotiations fail, there will be disastrous consequences for the world economy, for Europe and for the United Kingdom.
	During the last few weeks, Mr. Mandelson has been ominously quiet. There is a real and growing worry that the negotiations may fail, primarily because of difficulties in the American Congress but also because of the intransigence of agricultural interests in Europe. In the next few months, we may well be faced with disastrous circumstances in which our negotiations fail for the first time since the second world war, opening a Pandora's box of protectionism. The British Government should be, and according to much of their rhetoric will beand we hope they will bein the vanguard of efforts to prevent that from happening. However, what negotiating clout do they have in making other EU members come to an agreement with the Americans at the World Trade Organisation? There is no leverage; there is no negotiating position if it has already been conceded.

Peter Lilley: The hon. Gentleman makes an important point. He mentioned that Peter Mandelson has been ominously quiet, but I do not know whether he is aware that today Commissioner Danuta Hbner has not been quiet, and that she has made a speech: Reform of the EU budget: Time for a debate without taboos. She says that, as well as considering the agricultural policy, a central part of the review should concern the corrective mechanismsthe British abatement that remains. Therefore, what we have started could eliminate what we retain, rather than secure any benefits for what we have already given away.

Vincent Cable: That is a helpful intervention. I do not know how significant those Commissioner's comments are, but they seem to be genuinely worrying.
	In his initial remarks, the Minister tried to alarm usperhaps rightly, as we need to understand the Government position betterabout the consequences of this legislation not being ratified on time. It is a nuclear weapon in many respects, but we need to understand how the nuclear bomb actually works in these circumstances: what would be the practical consequences of detonating it?
	It is my understanding that on the financial front we would revert to the earlier own resources formula, which in purely financial terms would be better for the UK, so it is clearly not a deterrent in that sense. There is also the mechanics of how payments are made, and whether failure to ratify on time would affect the normal running of payments through the EU. Again, I confess ignorance on that: I do not know at what point a failure to achieve legislative closure affects the day-to-day payments. There is a section in the explanatory notes that I am afraid I do not understand, but the Minister might be able to explain it. It states:
	The additional UK contribution resulting from the reduction in allocated expenditure is limited to 10.5bn in 2004 prices over the period 2007 to 2013.
	The implication is that the changes are already in operation and that they will be retrospectively validated by this legislation, so there is nothing to stop these payments occurring now. There is also an implication that the deterrentthe nuclear bombis, in the end, largely an issue of face or prestige: the British Government cannot get their own legislature to agree a piece of legislation, which is very embarrassing. But is it more than embarrassment? That is the question that we have to answer.
	If the Government can explain that holding up this legislation in order to achieve these necessary improvements will do serious damage to the functioning of the EU and Britain's role within it, I would be hesitant to support the new clause, but if all that is at stake is a little embarrassment at the beginning of 2009which might, indeed, have the effect of stiffening the Government's spine in what then might be difficult negotiations about the reviewI cannot see the harm. As somebody who is a pro-European, I want the Government to explain convincingly to me why I should not support the new clause.

Peter Lilley: I am grateful for the opportunity to contribute to the debate, and I return to the subject of the own resources of the European Community with some nostalgia, as it was the subject on which I made my maiden speech some years ago, on which I had my maiden rebellion against my Government, and on which I made my maiden criticism of the then Prime Minister, Mrs. Thatcher, nearly bringing my career to a premature end. She was seducedor so it seemed to meby the argument that in return for a promise from the European Union to be more moderate in its future spending, she should concede an increase in the own resources of the European Community. I asked her at Prime Minister's questions whether she would follow that logic and reward a drunkard who had signed the pledge by giving him a bottle of whisky. She was not best amused, and I was told my career would not proceed any further. I was wrong, of course, as Mrs. Thatcher was in the process of securing for Britain the rebate that has enabled us to save billions of pounds of contribution to the EU, whereas the present Government are doing the reverse.
	I mention this because I think it shows that, having been critical of my own Government, I have a reasonable licence to be critical of this Government on this issue. My position in both cases is as someone who does not want to see a waste of public expenditure through an increase in spending that will not be properly monitored or controlled, and will not be in the interests of the taxpayer. I fear that what we are being asked to do today will result in that. That is why I welcome the new clause tabled by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), because it says that we should not go ahead with this increase in the own resourcesthe new structure reducing Britain's abatement by up to 10.5 billionunless we get something in return.
	Unfortunately, as far as one can see, the Government's negotiating process so far has not got anything in return. Indeed, the negotiating position of the former Prime Minister, Tony Blair, has been rather like that scandalously sexist aphorism, When a lady says never she means maybe, when she says maybe she means yes, and when she says yes she is not a lady.
	The former Prime Minister started off saying never:
	The UK rebate will remain and we will not negotiate it away. Period.[ Official Report, 8 June 2005; Vol. 434, c. 1234.]
	He then went on to say maybe:
	Of course, if we get rid of the common agricultural policy and we change the reason why the rebate is there, the case for the rebate changes.[ Official Report, 29 June 2005; Vol. 435, c. 1293.]
	Finally, he conceded a reduction in the rebate completely, but he said that he was getting something in returna reform of the agricultural policy, or at least a promise of a review of it.
	Accepting new clause 1 would enable us to see whether we have anything in return for the concessions made, and I cannot see how the Minister can possibly object to it. It proposes that the Treasury shall go ahead with implementing the new structure of own resources only if it can certify that we have secured a concession. It would be left to the Treasury's judgment whether it could honestly say that we had secured the concessionthe reviewthat we were promised, and which Tony Blair told this Parliament he had been offered. The Treasury would be able to say whether it had been substantively achieved, so I invite the Minister to say that he will accept the new clause. If he cannot, will he say frankly and openly that he rejects it because he cannot envisage circumstances in which the Treasury will be able to say that the promises given to this House will be delivered? That would be an appalling position.
	The case for retaining our rebate persists. It was based on the fact that the structure of the British economy is such that when the same rules are applied to us as are applied to other member states they result in an unfair burden on us relative to the advantages that we get. Even after the changes that have occurred, and those planned in this settlement, are taken into account, this country will receive the lowest amount of European spending per head of any of the 27 countries in Europe. We will receive a quarter of that received by Ireland, whose gross domestic product per head, we are now told, is above ours, and we will receive half that received by France, whose figure was only marginally below ours before the recent exchange rate changes.
	Despite that, the contribution that we make is significantly greater than that of many other countries. The Government have been prepared to give us the figures only in respect of France, but the contribution per head that British people will make to the European budget is 20 per cent. greater than that of France. Our net contribution is set to rise significantly under this settlement, as I mentioned in an intervention that the Minister was kind enough to take. The net contribution is rising faster than the generality of public expenditure is planned to do in this countryso much so that our net contribution to the European budget as a share of total public expenditure will rise by half over the time span of the current spending process.
	This is a very inequitable arrangement as far as British people are concerned. It was right to secure an abatement to try to offset some two thirds of the differential between the money that we put in and the money that we get out. Mrs. Thatcher was able to secure it because she had a very good case, she argued forcefully and she persuaded her partners to give it to her. According to the Government, we now have to reduce that abatement and to accentuate again the inequities that the correction mechanism was designed to redress. Correction is the word used in the European documents. The correction is to an inequity that Britain otherwise faced.
	We will get nothing in return, because the CAP budget will continue to rise. According to House of Commons figures, the CAP budget remains 48 per cent. of the total expenditure of the EU. Others claim that it has risen from 40 per cent. a few years ago to 44 per cent. Lord Patten said a year or so ago:
	We are talking about a budget for research and development that's been severely squeezed already in order to accommodate a continuing rise in agricultural spending that will actually go up from 40 to 44 per cent. of the overall community budget.
	So, far from our having secured some degree of reform already that is resulting in a reduction, it remains overwhelmingly a budget that goes on the CAP.
	The other part is spent on structural funds, and I want to ask the Chief Secretary whether the Government have made any progress in securing the reform that the present Prime Minister sought when he was still Chancellor. In 2003, he wrote in  The Times:
	When the economic and social, as well as democratic, arguments on structural funds now and for the future so clearly favour subsidiarity in action, there is no better place to start than by bringing regional policy back to Britain.
	In a Government document entitled A modern regional policy for the UK, the UK Government argued that member states with GDP per capita above 90 per cent. of the EU average should no longer receive structural funds money. Instead the money should be retained by them and spent by them, because, the Prime Minister has argued,
	There are many things that we want to do to encourage local skills and research and development, and local businesses, but we're not able to do because of the existing rules.
	So when, under the new clause, the Government report back to the House on whether they have secured concessions, they can tell us whether they have secured the concession, at least for countries such as ours, on regional funds, so that we control that money and use it for British priorities, rather than sending it to Brussels and having it sent back by them, having incurred administrative costs and being earmarked for uses that would not necessarily be the priority of the British people and the British Government.
	The former Prime Minister made the concessions that are incorporated in the Bill. At the time, the then Chancellor was leaking to the press that he did not really support that. He thought that Tony Blair was being unduly weak and giving away too much. Now is his chance. He is now Prime Minister and this is the great vision that he has been seeking to put before the British people. He can do what he indicated in leaks that he wanted to do and give his Back Benchers a free vote on this Bill. They will then put him in a strong position to renegotiate and get the sort of deal that he wanted.
	I fear that we did not get that deal because the outgoing Prime Minister had other priorities. He was looking to his own future. He did not want to end with a big row in Europe. That might have been in Britain's interests, but it would not have been in his. He made a concession, which was a big contribution to his own future campaign to be President of European undeclared contribution, which dwarfs those of any member of the present Cabinet. I hope that that mistake, that unfortunate policy and that unfortunate weakness of the previous Prime Minister can be put right.
	The new clause would strengthen the position of the Government and the House, and I hope that it will be accepted.

Peter Bone: I welcome the new clause, which has given the Government a get-out-of-jail card. I am sure that the Chief Secretary will accept it when we come to the end of the debate.
	It was clear from what my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) said that the current Prime Minister made it clear that he disagreed with his predecessor on the deal. Since I entered the House, one thing that I have learned is that a small Bill with a few clauses that is being debated for a short time is a most important Bill, and the Government are trying to get something through the back door.

William Cash: On the subject of the former Prime Minister and the current Prime Minister, does my hon. Friend think it more than likely that the deal between them was that the outgoing Prime Minister would stand down, as shown in the recent programme The Blair Years, in return for the undertaking that the new Prime Minister would not oppose either the own resources decision or the European treaty, which we will debate next week?

Peter Bone: That seems possible. The previous Prime Minister said that he would serve a full term, which he did not. Some deal must have been done.
	Let me address the new clause. We are talking about something of enormous importance to British taxpayers. During the years that Mr. Blair was in power, the contribution to the EU made by British taxpayers, adjusted to today's value of the pound, was more than 100 billionenough money to run the health service free of charge for this year. We are talking about a change in the formula whereby the EC allocates its budget to individual countries. Each country has the right to debate that new way of raising funds, but I suspect that only this country will have reservations, because only this country is dealt such a bad deal by the formula.

Jim Devine: Let us be honest. Does the hon. Gentleman believe that Britain should be in the EUyes or no?

Peter Bone: I am grateful for that intervention, Sir Michael, but I am sure that you would rule me out of order if I were to reply, because we are talking about the new clause in particular.
	The Chief Secretary was helpful in his opening statement and provided a lot of percentages, but he did not translate them into money. However, a written answer given in January 2006 set the record straight. It stated that in 2007, our net payments to the EU would be 4.7 billion, increasing to 6.8 billion by 2011an increase of 45 per cent. How can a 2.1 billion increase for British taxpayers be right when we are in the middle of an economic crisis that requires us to have almost a statutory pay limit in the public services?

John Hayes: My hon. Friend has enlightened the House with those figures. They stand in stark contrast with the assurance that the Chief Secretary gave us from the Dispatch Box a few moments ago that our contribution will be some 5 billion across the economic cycle. Either my hon. Friend is wrong, or the Chief Secretary inadvertently misled the House. If the second is the case, the Chief Secretary had better stand up now and put it right.

Peter Bone: I can only quote from the table in the written answer given by the hon. Member for Bury, South (Mr. Lewis). It clearly stated that in 2011, our net contribution would be in the range of 6 billion to 6.8 billion. I am sure that the Government were not wrong about that fact. Another interesting element of the written answer to which I have referred has to do with the so-called dodgy money that we get back from the EU. We give it 14 billion, and then some bureaucrat in Europe sends some of it back, with instructions about where it should be spent. I remember driving around a small village in Wales and reading a blue plaque that stated that what amounted to a motorway had been built by the EU. Of course, there were no cars on it at all, but the Bill means that even the dodgy allocation of returned funds that I have described will be smaller. This year, we will get back 5.6 billion, but it is predicted that we will get only 4.2 billion in each year from 2011 to 2013. It cannot be in the national interest for us to pay substantially more money to the EU and yet get less money in return.
	This is an enormously important debate. Thank goodness the Opposition, with the support of the Liberal Democrats, have given the Government a get-out-of-jail card.

Andy Burnham: I shall try to answer the points raised in the debate on new clause 1, which talks about the outcome of the review. The heart of the matter is the point at which the certificate to be issued by the Treasury would be debated in the House. When I intervened on the shadow Chief Secretary, his answer summed up the problem with the new clause. He referred me to paragraph 80 of the Commission document, which talks about a White Paper or report to be issued in the relevant time frame, but that is not the same as the outcome of the review.

Philip Hammond: indicated dissent.

Andy Burnham: The hon. Gentleman shakes his head and laughs, but that is a very important point. The White Paper would set out strategic, high-level principles, but that is not what the outcome of the budget review would be. Therefore, the new clause is immediately defective in that specific regard.

Philip Hammond: What the Minister has described does not make the new clause defective. Instead, it makes it much easier for him to accept the proposal, as all he is being asked to agree is that the Treasury should be required to certify that it
	considers that the outcome of the review is satisfactory to the interests of the United Kingdom.
	Further processes may have to be conducted after the report of the review is submitted, but he is merely being asked to sign up to a commitment that the Treasury will certify that report.

Andy Burnham: No, I do not think that that is what the new clause proposes. It states:
	The condition referred to in subsection (2) is that the Treasury shall have laid before both Houses of Parliament a report on the review by the European Commission...including a certificate that the Treasury considers that the outcome of the review is satisfactory to the interests of the United Kingdom.
	I repeat that the review does not conclude with the publication of the relevant White Paper. There is no possibility that the review could achieve its outcome before the House has been asked to ratify the own resources decision in January 2009, and that is why I contend that the new clause is defective.
	What, in essence, does new clause 1 ask the Government to do? The final sentence of paragraph 80 of the Commission's document states:
	The review will also be taken into account in the preparatory work on the following Financial Perspective.
	I am sure that the hon. Member for Runnymede and Weybridge will accept that that is where work on the review will lead, but the logic of the new clause is that the outcome of the financial perspective being debated this evening should be held up until we have achieved a satisfactory outcome from the next financial perspective. The outcome of that review will inform the preparatory work for and the discussions on the next financial perspectivethe one that begins after 2013. I say again, essentially, he is asking us to hold up the current financial perspective covering 2007 to 2013, pending the outcome of all of the discussions. The amendment is defective. It would cause us to miss the ratification deadline, and on that basis, I urge hon. Members on both sides of the House to reject it.
	The hon. Member for Twickenham (Dr. Cable) asked a fair question. He asked what would be the practical consequences of not ratifying: would there be serious consequences, or would the provisions of the current financial perspective simply be held up? Let me be plain: there is no formal sanctionno fine or formal proceedings that could be institutedbut implementation of the present financial perspective could be delayed. Backdating to the beginning of 2007 can happen only after ratification.

Vincent Cable: Will the Chief Secretary give way?

Andy Burnham: Let me finish the point. The other consequence is what one might call a diplomatic or political consequence. We have every reason to believe that 26 other member states will ratify the own resources decision into their domestic legislation, so we would face the prospect of being one versus 26 in explaining why we failed to ratify the decision. I do not want to over-dramatise by saying that not ratifying the decision will lead to a complete breakdown, but there would be real consequences to not meeting the ratification deadline.

Vincent Cable: If the Chief Secretary believes that the outcome can be assessed only at the end of 2008, why did the Prime Minister in his statement to the House last December specifically refer to the World Trade Organisation negotiations, which must be concluded within the next few months?

Andy Burnham: In his comments, the hon. Gentleman asked whether the effect of that review could be felt before 2013. The answer is that it could. The previous Prime Minister argued for that in securing the review. My point in response to the new clause is that the outcome of the review cannot possibly be known before the ratification deadline.

Philip Hammond: Will the Chief Secretary give way?

Andy Burnham: I will give way one last time to the shadow Chief Secretary, but I am trying to answer seriously the points that were put to me during the debate. There can be no hope that the outcome of the review will be known before the ratification deadline. I have pointed out that there will be consequences of being held to have acted in bad faith and being isolated, which is not what the Government want.

Philip Hammond: The point that the Chief Secretary made earlier is that the outcome of the review is not the final, definitive stage in preparing the next financial perspective. We accept that. All we are asking for is some clear sign that our partners are taking seriously the obligation into which they apparently entered to have a fundamental review of the EU budget, and that the Treasury, on the basis of the outcome of that review, is satisfied with that decision. That is what we are asking the Treasury to certify.
	Secondly, the right hon. Gentleman is quite wrong to say that the current financial perspective will be held up. The current financial perspective is agreed and already operational. The only question at issue is the own resources decision. We will fall back on the existing own resources decision if the Bill falls tonight.

Andy Burnham: I am disappointed that the hon. Gentleman did not let me finish my point. The Commission document says that there will be a fundamental, no-taboos review. That is what we secured. I have explained clearly why the new clause is utterly defective. It would leave this country totally isolated in Europe. I can only conclude that that is where he and his whole party want us to be.

Question put, That the clause be read a Second time:
	 The Committee divided: Ayes 216, Noes 301.

Question accordingly negatived.
	 Bill reported, without amendment.
	 Order for Third Reading read.

Andy Burnham: I beg to move, That the Bill be now read the Third time.
	This has been a long but good debate. [Hon. Members: It was short.] It felt long. I think that Members have been quite clear about where they stand.
	Let us be clear. This Government will make the case for being part of the European Union, for playing a constructive part in the European Union, and for making a sensible, practical and pragmatic agreement that helps to take the European Union forward into a new era. In our judgment, the own resources decision, which we are asking the House to incorporate into the law of this country, does precisely that. It is fair to the British taxpayer as it preserves the rebate and sees it grow in size over the financial period that we are discussing, but at the same time it will provide the resources for the social, economic and overall development of a peaceful and prosperous European Union. We all, I believe, have a common stake in that.

Philip Hammond: Was that the outcome that the Government anticipated in May 2005?

Andy Burnham: We have been over this ground all evening. This Government were clear about what they were seeking to achieveto preserve the rebate. Whatever fantasy arguments the Opposition wish to advance, at the heart of the own resources decision is an agreement whereby the British rebate rises but is disapplied in respect of non-agricultural spendingthe spending that helps economic and social progress in the countries of the former eastern bloc. That is what it pays for. It is absolutely correct to say that the former Prime Minister, Tony Blair, very much had in mind an agreement whereby Britain would retain the rebate and see it rise in value, with a change in the contributions that France makes to the European Union, whereby we now have rough parity between French and British contributions. That is a step forward. I think that he would also have said that Britain should pay its fair share of the costs of an enlarged European Union.
	The Conservatives have completely failed to demonstrate that the policy of saying, We support enlargement but we don't want to face up to the difficult decision of paying for it, has a scintilla of credibility across the European Union. We have heard no mention of it this evening, and the right hon. Member for Witney (Mr. Cameron) managed to attract only two other members to the new grouping in the European Parliament. I gather that there is now just one, Bulgariaand then there was one. We see a party utterly isolated in Europe. Perhaps the shadow Chief Secretary will update the House on how negotiations are progressing.

Philip Hammond: I have a question for the Chief Secretary. How would he characterise the position of the British Government in the summer of 2005, when they said that they enthusiastically supported enlargement but that the British rebate was fully justified and non-negotiable? How would he characterise that as anything other than, to use his own words, being in favour of enlargement but not being willing to pay for it?

Andy Burnham: We are going over and over this ground, and the hon. Gentleman will not accept that there is a difference between the application of the rebate in respect of the 15 members of the European Union

Philip Hammond: The Government said non-negotiable.

Andy Burnham: In my view, there is a difference between the application of the rebate in respect of the contributions and spending that those countries receive and its application in respect of the new member states. We make a clear distinction between those two groups.
	Throughout the debate, the Conservatives have failed to give any credible answer about what they would do to contribute to the costs of enlargement. The evidence is clear: they are utterly isolated in Europe. Well, they are not quite isolated; they have one ally among the whole European Union, but some of their new-found friends have dubious connections, we might say. That is not a position of strength, or an intellectual, commanding position from which to lecture us on how to conduct relations in Europe. We have secured a deal that helps to take the EU forward to the next era while securing the British interest.
	We have seen a great deal of limbering up tonight for the main event. As was said earlier, I am sure that lots of Conservative Members' diaries have been cleared for 15 days running, and I am sure that they will probably want more than that.

Peter Bone: Is the Chief Secretary making a new announcement? I thought that the Government had provided 20 days of discussion? Is this a new announcement that has slipped out?

Andy Burnham: Not at all. I do not think that he has been listening closely to what I said.  [ Interruption. ] I believed it was 15, but it may be 20. I am sure that he will be there for all 20 days. I say this to the hon. Gentleman. Am I right that the right hon. Member for Witney saidand I paraphrasethat the country would know that the Conservative party had changed when it stopped banging on about Europe? I remember him saying something along those lines. We have heard a lot of banging on about Europe today.
	As I said to the shadow Chief Secretary, we have heard some incredibly inflammable statements [ Laughter. ] Inflammatory statements, even. We have heard incredibly inflammatory statements from Conservative Members this evening, and I wonder what the parties the shadow Chief Secretary wishes to pull into his grouping in the European Parliament would make of sweeping generalisations about the EUfor example, that it is a fraudulent and corrupt organisation. No wonder that their isolation deepens.
	We will go forward and defend the agreement. The new clause that the Conservatives brought to the House showed the same level of confusion on these matters as their position on the EU reform treaty does. It would seek to unpick and renegotiate matters once the rest of Europe had moved ahead and reached a sensible agreement.
	British business looks to hon. Members and to any party that seeks to form the Government of this country to take a pragmatic approach to Britain in Europe. Yes, it wants us to defend the British interest, but it knows that, above all, its prosperity and that of the British economy is based squarely on good relationships with Europe. As I said, 56 per cent. of British trade is with the European Union. Would Conservative Members serve the interests of British business by leading us to an isolated position, whereby we were the only country to argue against a deal that was struck between 27 members of the European Union? Would that be in the long-term interests of business?

Philip Hollobone: The Chief Secretary claims that there are great benefits to the British economy in paying a huge membership fee for being in the European Union. However, is not Britain's trade deficit with the European Union now at record levels and getting worse every year?

Andy Burnham: The hon. Gentleman must make a judgment about that. Conservative Members must be honest and ask themselves whether we are better off out of the European Union. I have mentioned the hon. Member for Shipley (Philip Davies) several times this evening. He is the leading light of the Better Off Out group. That is an honest position. It is not honest constantly to seek ways of undermining and criticising but not admitting the true position.
	Foreign direct investment from the EU in the UK has quadrupled. It more than doubled between 2001 and 2005. That is worth celebrating. An extra 2.75 million jobs have been created throughout the EU.

Richard Shepherd: It is not about the budget.

Andy Burnham: Let me put a proposition to the hon. Gentleman. When the Republic of Ireland acceded to the European Union, there was considerable spending on structural funding and projects that enhanced economic competitiveness in the republic. Does he claim that some of the improvements in the north-west economy and that in other parts of the UK do not result from greater trade and partnership with the Republic of Ireland? Does not he accept that we have an interest in stronger economies throughout Europe? Economies that are stronger and are growing create more opportunities for our businesses to trade with them.

Richard Shepherd: The Chief Secretary claimed that inward investment had increased fourfold under the Government's maladministration, but that has nothing to do with the budget settlement. His point was therefore a non-sequitur. The debate has been most frustratingthe Chief Secretary does not appear to grasp the essentials.

Andy Burnham: Let us get down to brass tacks. The hon. Gentleman might not agree, but my position is that British companies began to do more business with companies in the Republic of Ireland following its accession to the European Union and the benefits that its economy gained from that change. There is already much greater trade between this country and businesses in the accession countries. The hon. Gentleman and his colleagues cannot grasp that there is a mutual interest: we all benefit from each other's success, which is stimulated by the investment that the own resources decision makes possible.
	Investment in the infrastructure of the accession countries means that their economies can grow and that they can develop, move forward and become bigger trading partners for the United Kingdom. That is a clear and plausible argument and I am sorry that the hon. Gentleman does not understand it. It is why we support the own resources decision and why I ask hon. Members to vote for Third Reading.

Philip Hammond: I am sorry that the Chief Secretary was so disparaging about new clause 1. It was a modestly phrased measure that could have improved the Bill sufficiently for us to tolerate it and extract something from the negotiations in Brussels in December 2005. As it is, without new clause 1, this is a miserable sell-out of a Bill and I shall have to urge my hon. Friends to vote against Third Reading.
	Let us be clear. The premise on which the Chief Secretary's arguments have rested throughout today is that anyone who questions any aspect of what the Government negotiated in Brussels is promoting the immediate collapse of the European Union and the casting into outer darkness of every country in eastern Europe, but that is simply not true. Being an enthusiastic member of an alliance is not a reason for abandoning the interests of those whom Governments are elected to serve, but this Government did indeed abandon those interests.
	In May 2005, the Government told us that the British rebate was fully justified and non-negotiable. In June 2005, it was not to be negotiated away, period. Before the Brussels summit in December 2005, however, the rebate apparently was negotiable, but only for guaranteed fundamental reform of the EU budget and of the common agricultural policy in particular. After the Brussels summit, the position was that we would give away 7 billion over seven years and much more in the future. The rebate was gonetraded for a vague and some might even think cynical promise from our European partners to review agricultural spending under the presidency of the country that is one of the largest beneficiaries of that spending.
	It is clear that the French thought that the UK was making a major concession at Brussels, through a Prime Minister who, again to quote the French Foreign Minister of the time, was failing to do his job calmly
	as a British Prime Minister.
	That says it all. The French believed that they had achieved a great victory in resisting even a review of agricultural spending within the 2013 financial perspective. It is not true, as the Chief Secretary asserted it was, that investment in eastern Europe is dependent upon conceding our rebate. If he believed that, how could his Prime Minister have gone into negotiations in the summer of 2005 with the position that he then took?
	At a time of huge pressure on UK public spending, the Government should have stood their ground and extracted real and durable budgetary reform, as they promised Parliament and the British people they would, with a mechanism linking the own resources decision, and thus the British rebate, to genuine progress on such reform, instead of a naive wish or hope that that might happen in the future. To their lasting shame, the Government did not do that, adding to a long list of broken promises and incompetent delivery.

Philip Hollobone: Does my hon. Friend share my concern that, in effect, the British people have been misled? During the general election of 2005, there was no indication from the Labour party that Britain's membership fee of the European Union would double, from a net contribution of 3.3 billion to at least 6.6 billion. Is that not a huge indictment of the honesty and integrity that we have come to expect from the Government?

Philip Hammond: My hon. Friend makes a good point. We are entitled to ask this question: when the then Prime Minister and the current Prime Minister pledged that the British rebate would be non-negotiable, in May 2005 and June 2005 respectively, were they simply being naive or was it worse than that? Did they genuinely believe that they could get through the process without conceding the British rebate, but fail to appreciate how incompetent they were at negotiation, or did they know all along that they would have to break that promise?
	So 7 billion of potential UK public spending, debt reduction or tax reductionas some of my hon. Friends might preferhas been lost. Much worse, however, is the fact that the baseline for future own resources decisions has been shifted downwards, and the cap on the cost to the UK of the surrender of the rebate comes off in 2013. The negotiating ratchet works inexorably against the interest of the United Kingdom.
	As the Government contemplate the fiscal and public service delivery challenges that face the UK in 2008, they might come to rue the day that they so casually threw away 1.9 billion a year and rising. When next we hear that this or that objective cannot be achieved because of a funding problem, the British people will remember what happened here tonight.
	To Parliament's shame, we have now become complicit in this sell-out of the UK interest. The hard-fought-for rebateour principal bargaining tool for reform of the EU budgetis being whittled away before our very eyes, and Parliament watches, apparently paralysed, as the Government betray the British people. This shameful, one single-clause Bill sums up 10 years of this new Labour Government: wasted money, broken promises and incompetent delivery. I urge my hon. Friends to vote against the Third Reading of the Bill tonight.

Vincent Cable: Given that those on the Front Benches effectively made their Third Reading speeches in the debate on clause 1 stand part, we do not need to repeat them at great length. I shall simply describe myself as a leading light in the better off in group. The Liberal Democrats have no embarrassment in describing ourselves as pro-European. We support British membership and constructive engagement, and we have criticised the present Prime Minister for not being constructive enough. We support enlargement and the financial adjustments necessary to make enlargement possible and to support the weaker countries in eastern Europe. We have no problem with any of that.
	We also believe, however, that it is possible to hold those views while simultaneously believing that the British Government should be tough in defending British interests and British financial interests. Countries that have been in the European Union since its inception, including the Netherlands and France, have Governments who take a very tough line on budgetary matters, and there is no reason whatever why British Governments should not do the same. We also believe that the British Government have a particular mission and an obligation to pursue rapid reform of the common agricultural policy, which is damaging to British and European taxpayers and consumers and to the world trade system. They should be tough on those issues.
	Our criticism of the Government is that, in these negotiations under the previous Prime Minister, they were weak and made an unacceptable deal. That is why we intend to vote tonight alongside people with whom we would otherwise not share many common views on the European question. It would have been better if the Government had accepted new clause 1, which was objectively helpful. I do not know what their motives were in rejecting it, but if they did not like it, they could have produced their own version of a scorecard to help to strengthen their negotiating position. They did not do so, however.
	The outcome of all this is rather unfortunate. The Government will have made a substantial concession on the rebate. They will continue to be party to a European Union that is not reforming the common agricultural policy at anything other than glacial speed. We might well be confronted over the next few months with the collapse of international trade negotiations, caused at least in part by the intransigence of European agricultural interests. The British Government will have absolutely no leverage whatever to prevent any of those things from happening.
	The certain consequence of all those things is that British cynicism about the European project will grow. We differ from the British Government in that, although we are a strongly pro-European party, we do not believe that the European project can be advanced by stealth. It has to be advanced with the support of the British public[Hon. Members: A referendum.] That is why we support a referendum on British membership of the European Union [Interruption.] Let me conclude my remarks.
	The danger is that we end up with the worst of all possible worlds, in which the Government win a Pyrrhic victory; they will of course push through the legislation, but in a context that will weaken overall British public support for the European project. That is a very negative outcome, and it is the main reason why we intend to vote against the Bill.

Peter Bone: It is a great pleasure to follow the hon. Member for Twickenham (Dr. Cable). Although we come from different sides of the argument, we have probably reached the same conclusions.
	In the final stages of today's consideration, I want to mention how unfortunate it is that so little time has been allowed to debate a Bill that will see 104 billion of taxpayers' money spent over the next few years. It is a great shame that this evening's debate was not allowed to continue until any hour. I have to have sympathy for the Chief Secretary, who battled hard, although I am afraid he has no support on the Government Benches. He did his best while batting on a very sticky wicket, defending the indefensible. He did not deny the fact that as from 2007, we are going to have a net contribution to the EU of 4.7 billion, which is expected to be 6.8 billion by 2011. That cannot be and is not a good deal for the British taxpayer.
	My most important point relates to what the Chief Secretary said at the very beginning of the debatethat the EU would implode if we did not agree to the Bill tonight. Let me quote him what Her Majesty's Treasury says about that:
	If any Member State fails to adopt the new Own Resources Decision by 31 December 2008 then the current Own Resources Decision (Council Decision of 29 September 2000: 2000/597/EC, Euratom) continues to operate until such time as the adoption process is completed, with the new Own Resources Decision then coming into force on the first working day of the month following the date of notification of the final adoption or ratification, retrospective to 1 January 2007.
	Her Majesty's Treasury says that the whole EU would not collapse. The budget would remain, but on the basis of the existing formula. The Chief Secretary could therefore quite happily have agreed to the new clause tabled from the Opposition Front Bench. That is a missed opportunity, which I believe the Government will rue.

Charles Walker: I shall be very brief, as other Members want to speak.
	The Government have an obligation to ensure that every red penny of taxpayers' money is spent efficiently. That applies to the money that will be given over by the Government to fund enlargement. Fifteen years ago, I went to Mayo to go fishing, and I had the great pleasure of flying into Knock international airport. It is in the middle of an enormous great bog; it is a very beautiful bog, but a bog nevertheless, with an international airport in it. When one gets out of the plane to get a taxi, one is swept down an amazing highwaya dual carriageway with many beautiful blue signs saying Made possible by the European Union. After about 7 miles, one reaches nothing more than a cattle track. It would be argued in Ireland that that is effective spending of European money. On being asked why on earth there should be an international airport at Knock, the taxi driver said, Because somebody had a vision that it needed to be here. We observed rather dryly that it was probably the building contractor. Anyway, that demonstrates the sort of thing we need to guard against as we pass over this money to an expanding Europe.
	The Government need to reassure the House over and over againand prove over and over againthat every penny is being spent effectively. They need to do that because at this moment they are breaking deals with public servants left, right and centre. The Chief Secretary spoke of the importance of not breaking deals, but if somebody is a prison officer their deal has been broken, and if they are a police officer their deal has been broken. It is not impossibleI cannot believe that it is impossiblefor the Government to find a few extra millions, 30 million to 60 million, to ensure that at least prison officers and police officers, who do the hardest job in the country, receive the money that they deserve.

Bernard Jenkin: I listened to much of the opening skirmishes of the debate on clause 1 stand part, and I am afraid that I heard nothing to convince me that it is in the national interest to give the Bill a Third Reading. I put it to the Chief Secretary that he should take his arguments down to his local pub in the constituency, and tell those who are enjoying themselves there that he has personally put through a Bill that will give the European Union an extra 7.4 billion of taxpayers' money over the planned period of the current financial perspective. I do not think he will get a very good reception.
	I am afraid that it is an indictment of the House that this is almost a private occasion for the few Members who are present this evening, and the very few others whom I might be tempted to spy in the House. This is a serious matter. It is extraordinary that, at a time when the pressure is on public spending and given that the rate of growth of public services such as health and education is to be much curtailed in the years ahead, the Government have squandered such a vast sum on the notion, described to us by the Chief Secretary, that somehow we will get back the money that is to be spent in the European Union through our relationship with the European Union.
	I want to explore two of those points. The idea that public spending creates prosperity was debunked in the 1970s, and has long been dismissed. There was recently a savage analysis of the efficiency of the European structural funds, showing how inefficiently and wastefully they are spent. That was just adumbrated by my hon. Friend the Member for Broxbourne (Mr. Walker), who gave the example of Knock airport. I have nothing against Knock itself

William Cash: It is a religious shrine.

Bernard Jenkin: Of course it is a religious shrine. Perhaps the matter has something to do with the Catholic plot that was referred to earlier, and the European Union, but I had better not go there. In any event, there is no evidence that European structural funds are any better spent than other parts of the European Union budget. The European Court of Auditors has failed to sign off the EU's accounts for the last 13 years because it is so concerned about the EU's inability to account for how its money it spent.

Andy Burnham: rose

Robert Goodwill: r ose

Bernard Jenkin: I had better give way to the Chief Secretary first, but I will give way to my hon. Friend afterwards.

Andy Burnham: We could have a debate about fraud related to structural and cohesion funding, but did I hear the hon. Gentleman correctly? Is he saying that there is no evidence that money from structural funds has not helped the economies of the countries that have received it? Merseyside, in my home region, has received substantial objective 1 funding over many years. Is he saying that the improvement in Merseyside's local economy is unrelated to any impact from structural funding? I find that very hard to believe.

Bernard Jenkin: I know that the right hon. Gentleman finds it hard to believe, but what has transformed the Irish economy, for example, is not the structural funding, but the much lower rates of taxation. It is possible, I concede, that the substantial subsidies that the Irish received in previous years allowed them to carry a much lower burden of taxation, but what is leading to the astonishing rates of growth in the eastern European countries is the liberalisation of their economies, the cutting away of bureaucratic interference from Government, and the lower rates of taxation. The fastest growing economies in eastern Europe are those with the most dynamic, enterprise-oriented tax systems. One of the things that is eroding our competitiveness is the inexorable rise of public expenditure and taxation, which will, as the shadow Chancellor, my hon. Friend the Member for Tatton (Mr. Osborne), described, leave Britain in the position of having failed to mend the roof while the sun was shining during the past 10 years.
	I have some relevant figures to hand. The Government inherited a national debt of 400 billion in 1996-97. That rose substantially in subsequent years, and by 2012-13the year this financial perspective endswe will have a public debt of 810 billion. That should be set alongside the situation in some European countries, which have no public debt at all because they have managed their economies very much more efficiently than we have.

Robert Goodwill: On a point raised by the Chief Secretary, he might recall that three years ago his colleagues in Sheffield were crowing about the fact that Polestar publishing had got a 6 million grant to build a new printing plant in Sheffield. At the time, I raised the concern that that would have a direct consequence for the four existing plants, including the one in Scarborough. This week, Polestar has announced 190 job losses in Scarborough as a direct consequence of that European structural funding going into that objective 1 area in Sheffield. So it is not all good news on objective 1 funding.

Bernard Jenkin: I not only welcome what my hon. Friend has said, but I add that if public spending in Scotland and the north-east and north-west was the answer in securing the prosperity of those regions, they would be growing faster than London and the south-east, but they are not. The disparities between those regions and the south of England have widened during this period of Labour government. I think what we need to be looking at is differential rates of taxation throughout the United Kingdom, as the idea that we should have a unitary tax system is holding back the UKbut that is a matter for another debate.
	When I think about the money that the House will be committing tonight, I look at my constituency. The Eastern Angles theatre company grant from the eastern Arts Council, for example, is being slashed by 100,00050 per cent.which will severely disable that extremely vibrant and capable arts and theatre company that operates throughout the entire region. I also look at the failure of the local health authority to open the Dedham surgery for want of 50,000 a yearnot 7.4 billionand at other surgeries that need to be upgraded. I look at the lamentable state of the A12, which grinds to a halt at least once a week because it is the most stressed piece of dual carriageway in the UK, yet the Government cannot find the money to upgrade it in the way that is necessary for the prosperity of my constituency. I look at the lack of money to spend on special educational needs in Essex schools, despite the fact that Essex is spending above the standard spending assessment on education. I look at the vast overspend on personal social services, particularly child welfare services, in Essex county council, which is not being funded by the Government because they are spending 7.4 billion on the European Union for no reason at all, instead of tackling these problems. This is not banging on about Europe; it is banging on about the needs of my constituency, which this Euro-obsessed Government think are less important than placating other countries' interests in the EU.
	I also look at the failure to honour the pay increase of the Essex police in my constituency, which is undermining the morale of the police who are fighting for law and order. I look at the Colchester garrison, which is training for operations in Iraq; 16 Air Assault Brigade is due to go to Iraq next spring. It is meant to have 110 up-armed Land Rovers for training in Iraq; it has six of them, because this Government think it is more important to appease EU interests than to fund our own armed forces. I look at the lamentable story of what happened to Corporal Wright, who was not lifted in good time from a minefield in Afghanistan because there were no helicopters with winches in Afghanistan as there should have been in order to address that matter.

Mr. Speaker: Order. I believe that the hon. Gentleman has finished. Has he?

Bernard Jenkin: I shall be finished shortly, Mr. Speaker.

Mr. Speaker: Well, if the hon. Gentleman is going to finish shortly, he should talk about the Bill.

Bernard Jenkin: I am talking about the language of priorities and public spending, Mr. Speaker. This Bill has got the priorities

Mr. Speaker: Order. The hon. Gentleman has been here long enough to know that this is the Third Reading of the Bill. He can talk about those things on other occasions, and he would be welcome to do so.

Bernard Jenkin: I shall sit down, but I should say that this Bill is about allocating very large sums of money to Europe instead of to those other vital national interests. It is a shame on this Government that they have such a weak European policy that they need to pay the money there instead of using it for our own people.

Richard Shepherd: One of the most interesting events of today was the contribution by the interim leader, if I may call him that, of the Liberal Democrats.

Vincent Cable: Former leader.

Richard Shepherd: I am sorry; the hon. Gentleman is the former interim leader of the Liberal Democrats. He touched on what unites many of us in this House, strange as it may seem. I profoundly believe in the comity of nations. For the four most recent centuries of this country's history, it has been vitally engaged in what happens in Europe. Our prosperity as a mercantile nation depends on trade. All those things are true. Where we have common interests, surely we should work together for them.
	At the heart of this matter is the question of who governs. I am delighted to see the Chief Secretary to the Treasury in his post, but goodness knows what has happened to the Treasury. Contrary to the environmental policies of the Government, he paraded a forest-full of notes, letters and papers. They were pushed across to him along the Benches to assist him in trying to define a very curious position.
	As my hon. Friend the Member for North Essex (Mr. Jenkin) has just said, this is about who bears taxes, how we negotiate and how we achieve the objectives of those who sent us here. What the Chief Secretary has tried to do in presenting this Bill represents an extraordinary distortion of facts that are on the record. We know what Mr. Blair negotiated and what promises and undertakings were given, as do the Liberal Democrats. This is not about Europe per se, in the sense of people being anti-Europethat will come next week if we are to engage on a great issue. This is about now, and the Chief Secretary's characterisation of other hon. Members as having a distaff viewif I may put it like thatdoes no credit to the Government. Each one of us here accounts as best we can for the arguments that we support. We heard the poorest level of distillation, spin and obfuscation. He was confronted with rational arguments and, as often as not, he did not even understand them.
	The proposition put during a most distinguished contribution from the Front Bench by my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), and put by my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) and by the hon. Member for Twickenham (Dr. Cable) was a rational argument as to whether the proposal was negotiated worthily and in the British interestthe interest of the people whom we represent and of whom my hon. Friend the Member for North Essex was speakingand whether we could have done better. The judgment of most independents standing to a side would be to say that this Government did not do at all well.
	In the end, we have to stand before our electorate and justify what we are doing. The tranches of money involved are huge, and we are entering a period of great uncertainty in the international situation. All of us know and recognise that, and we tremble in many instances. This Government have committed the taxpayersthe people whom we representto laying out sums of money, and they then come to dance in front of the House hoping that their spin will get them out of the situation. That they promised something else is neither here nor there, because they try to rewrite the story of what was promised.
	That is the deceit that we have had this evening. The Financial Secretary can keep waving. I take it as an indication that she and the Chief Secretary are drowning, in the terms of the poem. There is no poetry in this debate. It is a sad reflection of how destitute the Government are in the arguments that they now advance to try to show probity. We could get a better deal and the only amendment
	 It being Ten o'clock, Mr. Speaker  put  forthwith  the Question already proposed from the Chair, pursuant to Order [this day].

Question put, That the Bill be now read the Third time:
	 The House divided: Ayes 309, Noes 208.

Question accordingly agreed to.
	 Bill read the Third time, and passed.

DELEGATED LEGISLATION

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Delegated Legislation Committees),

Road Traffic

That the draft Passenger and Goods Vehicles (Recording Equipment) (Downloading and Retention of Data) Regulations 2008, which were laid before this House on 28th November, be approved. [Ms Diana R. Johnson.]
	 Question agreed to.

REGIONAL MINISTERS

Motion made, and Question proposed, That this House do now adjourn. [Ms Diana R. Johnson.]

Daniel Kawczynski: Thank you, Mr. Speaker, for allowing me to introduce this important debate on the role of regional Ministers. When the announcement was made in summer last year, I was quite pleased with the concept of regional Ministers. Not everybody agreed with me, but I felt that it was a good idea, because inevitably one sometimes has to deal with issues that are not specific to one's own constituency, but involve many other parts of the region in which one's constituency is situated. In our case, one of those problems is, of course, flooding. Regrettably, Shrewsbury floods regularly, but it is not alone: many communities all along the River Severn are affected. I thought that having a regional Minister would give me the opportunity to work with other Members of Parliament and the Minister responsible as a team to lobby the Government more effectively on a cross-party basis.
	With that in mind, I immediatelyon 2 August last yearsent a letter of congratulation to the hon. Member for Birmingham, Hodge Hill (Mr. Byrne) in which I invited him to Shrewsbury. I have sent repeated letters and e-mails and made telephone calls asking him please to fulfil his role as the Minister for the West Midlands and come to Shrewsbury.
	At this point, I have to say something nice about the Labour party: my experience of meeting Ministers has been very good. When I wanted to see the former Prime Minister, the opportunity arose straight away, and I could take constituents to see him. The same is true of the Foreign Secretary, the Home Secretary and the Secretary of State for Defence. Labour Ministers have been most accommodating about meeting me, so why has it been so difficult for me to meet the regional Ministerthe Minister responsible for the west midlands and, ultimately, for Shrewsbury?
	On 3 August, in  The Birmingham Post, the Minister for the West Midlands was quoted saying that he wanted to
	set about a 150-day consultation for an action plan
	for the west midlands. That was a good idea. The hon. Gentleman has a business background, as do I, and I think that the first thing a Minister should do in such a role is set about producing an action plan, in order to lobby on the region's behalf. However, I have spoken to the chief executives and the leaders of Shropshire county council and Shrewsbury and Atcham borough council and been told that nobody in either council has had any interaction with the Minister for the West Midlands. I put it to the Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), how can one have a 150-day consultation to decide the priorities of the west midlands without any interaction with the chief executives and leaders of the councils of Shropshire, which is one of the most important countiesmy hon. Friend the Member for North Shropshire (Mr. Paterson) will agree with me that it is the most important countyin the west midlands?
	The Minister for the West Midlands has not even come to Shropshire to discuss those issues. Regrettably, on the one occasion that he did come to the county, he did not inform me of his visit. He came in the week we all expected a general electionon 1 Novemberand he was photographed in the  Shrewsbury Chronicle with the Labour candidate and Labour councillors.

Peter Luff: My hon. Friend is making an important and cogent speech. I wrote to the Minister for the West Midlands and for Borders and Immigration on 13 November, inviting him to Worcestershire to explore an issue relevant to both the hats he wears. I have had no reply to that letter. However, last Saturday he was in Worcester addressing a seminar of the Worcester Labour party. A pattern may be emerging.

Daniel Kawczynski: I absolutely concur with my hon. Friend. I believe that the announcement of regional Ministers was yet more Labour spin. They are an opportunity for the Labour Government to have a regional Labour party co-ordinator or Labour party supremo, who will ensure that everything is done for the Labour constituencies and that as much publicity as possible is generated in Labour marginals in the west midlands and other regions. From now on, I shall be watching like a hawk and asking many questions about our regional Ministerwhere he is going and who he is meetingso that the role of regional Minister does not become political but becomes what it is meant to be.
	I know that you, Mr. Speaker, and many others feel passionately about the scrutiny that takes place in the House. We Back Benchers have a responsibility to provide that scrutiny, and our constituents feel passionately that we must hold the Government to account. Regrettably, none of the procedures allowing us formally to scrutinise the regional Minister has been put in place. We were promised regional Select Committees and regional questions, but they have not been introduced. Seven or eight months down the line, there are no mechanisms in place for holding a regional Minister to account in the Chamber. How on earth can we hold Ministers to account if no safety mechanisms have been put in place, and if it is extremely difficult to get hold of the Ministers?
	We should have quarterly meetings with the regional Minister. We were not called to see him when he took up his position. When I was in business, when someone became a manager of a company, the first thing that they did was call in their sales force, set out objectives, and get to know the team on a professional and personal basis. None of us has had a team meeting. Many hon. Members present hold west midlands seats; we have not had a single meeting in the House of Commons with the regional Minister to discuss the priorities for the west midlands.

Andrew Mitchell: I am grateful to my hon. Friend for giving way to me in my capacity as shadow Minister with responsibility for Birmingham; I have a specific interest in the issue. He is making an extremely important point

Mr. Speaker: Order. This is an Adjournment debate, and shadow Ministers do not get called in Adjournment debates. This is a Back Bencher's debate. The hon. Gentleman can speak as a Back Bencher, if he wishes.

Daniel Kawczynski: I am grateful to my hon. Friend for giving me the opportunity to mention Birmingham. Shropshire Members are concerned about the fact that Birmingham always gets priority in the west midlands. The Minister for the West Midlands represents a Birmingham seatBirmingham, Hodge Hill. The BBC's politics website tells us what his priorities are, and they all seem to be focused on Birmingham. When will Shropshire get a look-in?

Andrew Mitchell: My hon. Friend makes an important point. He will have noticed that no fewer than 14 Conservative Members from the west midlands are attending this important debate. We in Birmingham cannot flush the regional Minister out, either. To try to find out what he was doing, I tabled a question asking
	what proportion of his working week the Minister for the West Midlands spent carrying out his regional responsibilities in the latest period for which figures are available.
	I received a response that can only be described as insulting. I was told:
	Time spent on regional duties very much varies from week to week.[ Official Report, 10 January 2008; Vol. 470, c. 770W.]
	That is not an acceptable answer, and I will table more questions. I hope that my hon. Friend agrees that we want to see the Minister doing the job with which he was charged, and we want him to be accountable to the House and the west midlands.

Daniel Kawczynski: I concur with my hon. Friend. I want meetings to be held, at least quarterly, for all west midlands Members of Parliament, in which we can scrutinise the Minister and get to know him on a professional and personal basis.

Edward Leigh: Will my hon. Friend allow me to intervene?

Daniel Kawczynski: Yes, very quickly. This is the last intervention that I will take.

Edward Leigh: The Minister for the East Midlands is equally invisible. Perhaps a pattern is emerging. Could the posts possibly be just a gimmick, and not a reality?

Daniel Kawczynski: Regrettably, I concur with my hon. Friend. There was a great fanfare when the role was announced, but given the lack of scrutiny Committees and regional questions, I fear that the Government are not serious about introducing the role properly. I genuinely want us all to work on a cross-party basis. All the west midlands Members of Parliament and the Minister for the West Midlands should meet in the region, and hold public meetings from time to time, so that members of the public can see us working together on a cross-party basis, debating the priorities for the west midlands. I am sure that it would help us to engage more with members of the public, rather than deciding the priorities of the west midlands in secret meetings in the House or according to the Minister's own agenda.

Denis MacShane: I am grateful to the hon. Gentleman for giving way, especially after his appeal for a debate on a cross-party basis. Which of the departmental question days would he sacrifice for regional questions? Will he inform the House, to guide the Government?

Daniel Kawczynski: As the right hon. Gentleman knows, it is not my responsibility to define the appropriate time. The Government announced regional Ministers, and as he knows, it is the responsibility of the Government to find the appropriate time.

Owen Paterson: Will my hon. Friend give way?

Daniel Kawczynski: In a moment.
	The Minister for the West Midlands has been described as the most important man in the west midlands by BBC Politics. If he is indeed the most important man in the west midlands, by golly, I want him in Shropshire, and I want him to understand the key issues affecting Shropshire. That is why I feel so angry that he has not been to Shropshire in an official capacity and he is not interacting with my council.
	I give way to my neighbour, my hon. Friend the Member for North Shropshire (Mr. Paterson).

Owen Paterson: I congratulate my hon. Friend on securing the debate. Will he make the simple point to the Minister on the Front Bench, the Under-Secretary of State for Communities and Local Government, the hon. Member for Gloucester (Mr. Dhanda), that he is not the Minister for the West Midlands, the hon. Member for Birmingham, Hodge Hill (Mr. Byrne)? The Minister for the West Midlands is not interacting with this cross-party debate in the House of Commons to discuss his ministerial role.

Daniel Kawczynski: Indeed. When I was interviewed, I tried to raise the point with  The Birmingham Post and to say how concerned I was about the matter and that I would call a debate. In reply, the Minister said in the major Birmingham newspaper that he would welcome such a debate because he would want to highlight my shortcomings as an MP[Hon. Members: Short?] The Minister said he would discuss my shortcomings as an MP and suggest that Shrewsbury would be better off represented by a Labour politician. Nobody feels more passionately about Shrewsbury than I do, and I will continue to fight for the people of Shrewsbury with all my heart and passion for as long as they allow me to do so. Having refused to see me for the past six months, what does the Minister for the West Midlands know of my shortcomings?
	I thank you, Mr. Speaker, for giving me the opportunity of holding this debate, which has finally given me the chance to scrutinise the Minister. This is Parliament in action. A Member of Parliament cannot get hold of the Minister, who repeatedly refuses to reply to letters, phone calls and e-mails, so I am grateful to you for allowing me to highlight my concerns on the record.
	Because the Minister knew that the debate was to take place, by some strange, lucky coincidence I finally managed to have a meeting with him yesterday[Hon. Members: Ah!]in the Pugin Room for half an hour over a cup of tea. [Hon. Members:  Who paid?] I do not recall; I think that the Minister paid for the tea. As a result of that meeting, the Minister promised to come to Shrewsbury and meet all the Members of Parliament from Shropshire, as well as our county council and all the district councils in order to evaluate the priorities of Shropshire and to work closely with us. My hon. Friends will be displeased with what I am about to say. I found the Minister to be a charming man, clearly professional, highly educated, and one of those rare entities in the Labour partysomebody who has been in business. I was impressed with that, because he spoke as a business man, with that sense of professionalism. I was fuming before he arrived, but when he left after half an hour I was somewhat pacified and much more relaxed. I very much hope that he will fulfil his obligation

Stephen Crabb: Where is he?

Daniel Kawczynski: I ask, please, for no barracking from my own side.
	I hope that the hon. Member for Birmingham, Hodge Hill will now play his role, be an effective Minister for the West Midlands and help me look after Shropshire. I quite like him as an individual; I think that he has been let down by the system. Frankly, the Government are not treating the role of regional Ministers properly and I want to hear from the Under-Secretary about the concrete steps that he will take to make sure that we, as Members of Parliament in the west midlands, can hold the Minister responsible to account.

Parmjit Dhanda: I congratulate the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) on securing this debate. I have often taken part in Adjournment debates and usually there are only a couple of us here. It is terrific that at least a dozen of the hon. Gentleman's colleagues are here with him. I am grateful to the hon. Gentleman for ringing me at my constituency office as well as at the Department on Friday. He said that he wanted this to be a moderate, measured and positive debate, with no knocking. I am delighted to hear of the new relationship that he has forged with his regional Minister in the past 24 hours. Long may that continue.

Michael Fabricant: Why is he not here?

Parmjit Dhanda: Part of the reason may be that although the focus of the points made by the hon. Member for Shrewsbury and Atcham was on the west midlands and his regional Minister, the title of his debate is about the role of regional Ministers. That is why I am hereto talk about the role across the board, and not just in respect of that specific regional Minister.
	I hope that the hon. Gentleman will agree that the Government have long been committed to strengthening regional and local institutions, in Shrewsbury and elsewherewhether through our modernisation of local government so that it is better able to lead and provide key services for the communities that it serves, or through creating regional development agencies to improve regional economic performance and to ensure that every part of our country benefits from the sustained economic growth that we have seen in recent years. Regional Ministers are a further example of that commitment to devolution and decentralisation.
	The plan to have a Minister for each of the nine English regions was announced last June. The remit for each of my nine colleagues is to be both an advocate for the region and a representative of central Government in the region. That is an important new development in the Government's empowerment of the English regions, and a further recognition that not every decision can or should be taken within a mile of Westminster. Having regional Ministers complements the Government's approach to local freedoms and flexibilities set out in last year's local government White Paper. It is also in accord with the recommendations of the review of sub-national economic development. That will improve the effectiveness of regional governance and regional economic performance in particular. The hon. Gentleman will want me to get on to the issue of governance and accountability, not least to answer some of the questions raised in interventions; I shall try to get to that bit as quickly as I can.
	Regional Ministers are already contributing to the leadership of their regions and influencing Whitehall on their regions' behalf. In the west midlands, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) is doing an excellent job representing the region in Government and Government in the region. He is working closely with local government and other civic leaders to ensure that people in the region have access to good-quality jobs and affordable homes.
	I hear what the hon. Member for Shrewsbury and Atcham said about Shropshire. I am pleased to hear that my hon. Friend will be visiting, and that he met the hon. Gentleman for half an hour. I am sure that that will be the first of many meetings. My hon. Friend is providing leadership of the implementation of the sub-national review in the west midlands and has taken an active interest in the renewal of Birmingham New Street stationa project of regional and national importance, and one that is important to all of us.
	Similarly, in my own region and constituency the support and influence of the Minister for the South West, my hon. Friend the Member for Exeter (Mr. Bradshaw), was a great help when we had flooding problems similar to those that the hon. Gentleman experienced. I am almost afraid to mention the word flooding tonight, because I fear that very many of my own constituents are concerned for their homes at the moment. The system has been a help around the country, where regional Ministers have been able to engage with such difficulties and to support local constituency Members of Parliament.
	Those are just two examples, but in every other region regional Ministers are helping to galvanise regional institutions and to improve the delivery of local public services. The appointment of regional Ministers as regional champions also creates a new opportunity to strengthen the regional voice within Government. They channel regional and local views into central Government policy development at the most senior levels.

Peter Luff: rose

Denis MacShane: rose

Parmjit Dhanda: I will give way briefly to my right hon. Friend the Member for Rotherham (Mr. MacShane), but if I give way again after that, I would rather do so to the hon. Gentleman whose debate this is, because we are very short of time.

Denis MacShane: I am deeply grateful to my hon. Friend. I fully accept and support all his arguments; the hon. Member for Shrewsbury and Atcham (Daniel Kawczynski) has also made powerful arguments. Is not the concept of Her Majesty appointing a Minister that he or she is accountable and has to explain his or her duties to Parliament? [Hon. Members: Then where is he?] Nothe hon. Member for Shrewsbury and Atcham has raised an important point in a non-partisan way. Will my hon. Friend indicate if there is any thinking as to whether at any stage these Ministers might be accountable here?

Parmjit Dhanda: Indeed. I am coming to the issue of accountability to Parliament, which is the thrust of Members' questions, and rightly so.
	Last summer's floods and foot and mouth outbreaks are good examples of regional Ministers' role out in the constituencies. Regional Ministers representing the worst affected regions were in close touch with the relevant Ministers and agencies to ensure a concerted, coherent response in the immediate aftermath. As well as individual representations, that work is co-ordinated through a regional Ministers network jointly chaired by my right hon. Friends the Secretary of State for Communities and Local Governmentmy Departmentand the Secretary of State for Business, Enterprise and Regulatory Reform.
	The role of regional Ministers is described in the Green Paper The Governance of Britain, published on 3 July. They will: be a visible presence in the region; provide leadership in relation to specific issues; promote national policies regionally; maintain close relationships with relevant regional stakeholders such as regional development agencies; promote achievement of the Government's regional economic performance objectives; and advise my right hon. Friends the Secretary of State for Business, Enterprise and Regulatory Reform and the Secretary of State for Communities and Local Government on the approval of regional strategies and my right hon. Friend the Secretary of State for Business, Enterprise and Regulatory Reform on RDA board appointments.

Peter Luff: The hon. Gentleman is making a case, but it is literally incredible. The Minister for the West Midlands added nothing to the debate about flooding in the west midlands. His Cabinet colleagues and Ministers in other Departments did, but he did nothing whatever. He does not even reply to letters from Members. He is not accountable and he is adding no value. The system that the hon. Gentleman is describing does not exist in practice, and I wish that he would realise that.

Parmjit Dhanda: I think that the hon. Gentleman is being unfair. I do not personally like hon. Members in any part of this House talking in those terms about others who are not here to defend themselves.

Hon. Members: They should be here.

Mr. Speaker: Order. Let me get one thing straight for the record. It is not the case that any particular Minister should be here. It is the Government's right to put up a Minister to answer the Adjournment debate. There is a Minister here, everything is in order, and it has been good-natured so far.

Peter Luff: rose

Mr. Speaker: We should remember that we are eating into an hon. Member's time.

Peter Luff: On a point of order, Mr. Speaker. I was accused of attacking an hon. Member in his absence. I was not doing that; I was attacking the system, not the individual.

Mr. Speaker: That is clear.

Parmjit Dhanda: Thank you, Mr. Speaker. That has cleared that up.

Daniel Kawczynski: I shall make only one intervention. I know that the Minister is coming to the important point raised by the right hon. Member for Rotherham (Mr. MacShane) about accountability in this House. But one day the Minister will find himself a Member of Parliament under a Conservative Administration, and when we are in office I am sure that he will want the same effective access to a regional Minister that he has at the moment under a Labour Government. Will he assure me that shire counties, particularly those with Conservative local authorities and Conservative MPs, will not face a second-class service from regional Ministers compared with that enjoyed by our Labour colleagues?

Parmjit Dhanda: As the Member representing Gloucester, in a shire county, I can say that we have had a good response and good support from our regional Minister, and I believe that that is the case in the other regions as well.
	The Government have not sought to micro-manage the role of regional Ministers. It is for regional Ministers to decide how they can contribute most effectively to their region. I know that all regional Ministers have had an extensive series of visits and meetings with key players in their region, and I hope that the hon. Gentleman's meeting yesterday will prove useful for him and for what happens in his county. My hon. Friend the Minister for the West Midlands has visited 14 constituencies since he was appointed. My right hon. Friend the Minister for the North East has visited 20 constituencies, and he finds time to be the deputy Chief Whip as well, so it important to mention him. Regional Ministers have used their knowledge, combined with their own substantial experience of their region, to develop their priorities and their own regional style.
	Parliamentary accountability of regional Ministers has been the subject of some speculation. In The Governance of Britain we make clear the Government's view that regional Ministers should be accountable through parliamentary questions and scrutiny by parliamentary Committee. In common with last year's Communities and Local Government Committee report on regional government, the Government believe that one means of achieving such scrutiny could be the establishment of nine regional select committees. Furthermore, in the sub-national review, we also made clear our support for greater parliamentary scrutiny of regional institutions and regional economic policy. That process too could be Committee-based, on either the Select Committee or the Standing Committee model. I would be interested to hear the views of the hon. Gentleman, and those of Members throughout the House, as to the best way of doing that.
	The Government have made clear their position on greater scrutiny of regional institutions. The exact details are now a matter for Parliament, and I hope that hon. Members who are genuinely interested in this debate will take the opportunity to articulate their views. I welcome the Modernisation Committee's announcement in October of its inquiry into regional accountability. The Government will be submitting their evidence in due course. I have no doubt that the Modernisation Committee will also consider whether there should be any changes to the current position on parliamentary questions put to regional Ministers, which are at present answered on their behalf by my right hon. Friends the Secretary of State for Communities and Local Government and the Secretary of State for Business, Enterprise and Regulatory Reform, although such questions do go through a process of being seen by regional Ministers as well. I look forward to the Committee's inquiry
	 The motion having been made after Ten o'clock, and the debate having continued for half an hour, Mr. Speaker  adjourned the House without Question put, pursuant to the Standing Order.
	 Adjourned at sixteen minutes to Eleven o'clock.